80_FR_52239 80 FR 52073 - Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the Options Regulatory Fee

80 FR 52073 - Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the Options Regulatory Fee

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 80, Issue 166 (August 27, 2015)

Page Range52073-52075
FR Document2015-21208

Federal Register, Volume 80 Issue 166 (Thursday, August 27, 2015)
[Federal Register Volume 80, Number 166 (Thursday, August 27, 2015)]
[Notices]
[Pages 52073-52075]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-21208]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-75749; File No. SR-Phlx-2015-71]


Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change To Amend the 
Options Regulatory Fee

August 21, 2015.
    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 August 17, 2015, 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 make adjustments to its Options Regulatory 
Fee (``ORF'') by amending Section IV, Part D of the Pricing Schedule.
    While changes to the Pricing Schedule pursuant to this proposal are 
effective upon filing, the Exchange has designated these changes to be 
operative September 1, 2015 and February 1, 2016, as noted herein.
    The text of the proposed rule change is available on the Exchange's 
Web site 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 purpose of the proposed rule change is to: (1) Decrease the ORF 
from $0.0045 per to $0.0035 as of September 1, 2015 and increase the 
ORF from $0.0035 to $0.0040 as of February 1, 2016 to account for 
additional fine revenue, cost reductions and to balance the Exchange's 
regulatory revenue against the anticipated costs and potential fines; 
and (2) remove the requirement that the ORF may only be modified semi-
annually.
Background
    The ORF is assessed to each member for all options transactions 
executed or cleared by the member that are cleared at The Options 
Clearing Corporation (``OCC'') in the Customer range (i.e., that clear 
in the Customer account of the member's clearing firm at OCC). The 
Exchange monitors the amount of revenue collected from the ORF to 
ensure that it, in combination with other regulatory fees and fines, 
does not exceed regulatory costs. The ORF is imposed upon all 
transactions executed by a member, even if such transactions do not 
take place on the Exchange.\3\ The ORF also includes options 
transactions that are not executed by an Exchange member but are 
ultimately cleared by an Exchange member.\4\ The ORF is not charged for 
member proprietary options transactions because members incur the costs 
of owning memberships and through their memberships are charged 
transaction fees, dues and other fees that are not applicable to non-
members. The dues and fees paid by members go into the general funds of 
the Exchange, a portion of which is used to help pay the costs of 
regulation. The ORF is collected indirectly from members through their 
clearing firms by OCC on behalf of the Exchange.
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    \3\ The ORF applies to all ``C'' account origin code orders 
executed by a member on the Exchange. Exchange Rules require each 
member to record the appropriate account origin code on all orders 
at the time of entry in order to allow the Exchange to properly 
prioritize and route orders and assess transaction fees pursuant to 
the Rules of the Exchange and report resulting transactions to OCC. 
See Exchange Rule 1063, Responsibilities of Floor Brokers, and 
Options Floor Procedure Advice F-4, Orders Executed as Spreads, 
Straddles, Combinations or Synthetics and Other Order Ticket Marking 
Requirements. The Exchange represents that it has surveillances in 
place to verify that members mark orders with the correct account 
origin code.
    \4\ In the case where one member both executes a transaction and 
clears the transaction, the ORF is assessed to the member only once 
on the execution. In the case where one member executes a 
transaction and a different member clears the transaction, the ORF 
is assessed only to the member who executes the transaction and is 
not assessed to the member who clears the transaction. In the case 
where a non-member executes a transaction and a member clears the 
transaction, the ORF is assessed to the member who clears the 
transaction.
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    The ORF is designed to recover a portion of the costs to the 
Exchange of the supervision and regulation of its members, including 
performing routine surveillances, investigations, examinations, 
financial monitoring, and policy, rulemaking, interpretive, and 
enforcement activities. The Exchange believes that revenue generated 
from the ORF, when combined with all of the Exchange's other regulatory 
fees, will cover a material portion, but not all, of the Exchange's 
regulatory costs. The Exchange will continue to monitor the amount of 
revenue collected from the ORF to ensure that it, in combination with 
its other regulatory fees and fines, do not exceed regulatory costs. If 
the Exchange determines regulatory revenues exceed regulatory costs, 
the Exchange will adjust the ORF by submitting a fee change filing to 
the Commission.
ORF Adjustments
    The Exchange is proposing to decrease the ORF from $0.0045 to 
$0.0035 as of September 1, 2015 and increase the ORF from $0.0035 to 
$0.0040 as of February 1, 2016 in order to account for regulatory 
revenue from disciplinary actions taken by the Exchange. The Exchange 
regularly reviews its ORF to ensure that the ORF, in combination with 
its other regulatory fees and fines, do not exceed regulatory costs. 
The Exchange believes that decreasing the ORF by $0.0010 from September 
1, 2015 through January 31, 2016 and then adjusting the ORF as of 
February 1, 2016 to $.0040 (a $0.0005 reduction from the current 
rates), will permit the Exchange to cover a material portion of its 
regulatory costs, while not exceeding regulatory costs.
Semi-Annual Changes to ORF
    The Exchange previously filed a rule change to Section IV, Part D 
of the Pricing Schedule to specify the frequency with which the 
Exchange may change the ORF.\5\ At that time, the

[[Page 52074]]

Exchange amended the Pricing Schedule to specify that the Exchange may 
only increase or decrease the ORF semi-annually, and any such fee 
change will be effective on the first business day of February or 
August.\6\ The Exchange stated in that filing, ``[i]n addition to 
submitting a proposed rule change to the Securities and Exchange 
Commission (``Commission'') as required by the Act to increase or 
decrease the ORF, the Exchange will notify participants via an Options 
Trader Alert of any anticipated change in the amount of the fee at 
least 30 calendar days prior to the effective date of the change.'' \7\
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    \5\ See Securities Release No. 71569 (February 19, 2014), 79 FR 
10593 (February 25, 2014) (SR-Phlx-2014-12).
    \6\ Id.
    \7\ Id.
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    The Exchange is proposing to eliminate the requirement that its ORF 
may be only increased or decreased semi-annually because the Exchange 
believes it requires the flexibility to amend its ORF as needed to meet 
its regulatory requirements and adjust its ORF to account for the 
regulatory revenue that it receives and the costs that it incurs, as 
evidenced by the adjustments proposed in this rule change. While the 
Exchange is eliminating the requirement to adjust only semi-annually, 
it will continue to submit a rule proposal with the Commission for each 
modification to the ORF and notify participants via an Options Trader 
Alert of any anticipated change in the amount of the fee at least 
thirty (30) calendar days prior to the effective date. The Exchange 
believes that the prior notification to market participants will 
provide guidance on the timing of any changes to the ORF and ensure 
market participants are prepared to configure their systems to properly 
account for the ORF.
    While changes to the Pricing Schedule pursuant to this proposal are 
effective upon filing, the Exchange has designated these changes to be 
operative September 1, 2015 and February 1, 2016, as noted herein.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the provisions of Section 6 of the Act,\8\ in general, and with 
Section 6(b)(4) and 6(b)(5) of the Act,\9\ 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 that the Exchange operates or controls, and is not 
designed to permit unfair discrimination between customers, issuers, 
brokers, or dealers.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78f.
    \9\ 15 U.S.C. 78f(b)(4) and (5).
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    The Exchange believes that lowering the ORF from $0.0045 to $0.0035 
as of September 1, 2015 and then increasing the ORF from $0.0035 to 
$0.0040 as of February 1, 2016 is reasonable because the Exchange's 
collection of ORF needs to be balanced against the amount of regulatory 
revenue collected by the Exchange. The Exchange believes that the 
proposed adjustments noted herein will serve to balance the Exchange's 
regulatory revenue against the anticipated regulatory costs. It is 
further reasonable because both price changes discussed herein 
represent a price reduction compared to the current rate of $0.0045.
    The Exchange believes that lowering the ORF from $0.0045 to $0.0035 
as of September 1, 2015 and then increasing the ORF from $0.0035 to 
$0.0040 as of February 1, 2016 is equitable and not unfairly 
discriminatory because these adjustments would be applicable to all 
members on all of their transactions that clear as Customer at OCC. In 
addition, the ORF seeks to recover the costs of supervising and 
regulating members, including performing routine surveillances, 
investigations, examinations, financial monitoring, and policy, 
rulemaking, interpretive, and enforcement activities. The ORF is not 
charged for member proprietary options transactions because members 
incur the costs of owning memberships and through their memberships are 
charged transaction fees, dues and other fees that are not applicable 
to non-members. Moreover, the Exchange believes the ORF ensures 
fairness by assessing higher fees to those members that require more 
Exchange regulatory services based on the amount of Customer options 
business they conduct. Regulating Customer trading activity is more 
labor intensive and requires greater expenditure of human and technical 
resources than regulating non-Customer trading activity. Surveillance, 
regulation and examination of non-Customer trading activity generally 
tends to be more automated and less labor intensive. As a result, the 
costs associated with administering the Customer component of the 
Exchange's overall regulatory program are anticipated to be higher than 
the costs associated with administering the non-Customer component of 
its regulatory program. As such, the Exchange proposes assessing higher 
fees to those members that will require more Exchange regulatory 
services based on the amount of Customer options business they 
conduct.\10\ Additionally, the dues and fees paid by members go into 
the general funds of the Exchange, a portion of which is used to help 
pay the costs of regulation.
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    \10\ The ORF is not charged for orders that clear in categories 
other than the Customer range at OCC (e.g., Market Maker orders) 
because members incur the costs of memberships and through their 
memberships are charged transaction fees, dues and other fees that 
go into the general funds of the Exchange, a portion of which is 
used to help pay the costs of regulation.
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    The Exchange believes that the proposed rule change to remove the 
limit to amend the ORF only semi-annually, with advance notice, is 
reasonable because the Exchange will continue to provide market 
participants with thirty (30) days advance notice of amending its ORF. 
Also, the Exchange is required to monitor the amount of revenue 
collected from the ORF to ensure that it, in combination with its other 
regulatory fees and fines, do not exceed regulatory costs. Therefore, 
the Exchange believes it is reasonable to remove the semi-annual limit 
to amend its ORF in order to permit the Exchange to make amendments to 
its ORF as necessary to comply with the Exchange's obligations.
    The Exchange believes that the proposed rule change to remove the 
limit to amend the ORF only semi-annually, with advance notice, is 
equitable and not unfairly discriminatory because it will apply in the 
same manner to all members that are subject to the ORF. Moreover, the 
Exchange believes that the proposed ORF is a small incremental cost for 
Customer executions.\11\ The Exchange has in place a regulatory 
structure to surveil for, exam [sic] and monitor the marketplace for 
violations of Exchange Rules. The ORF assists the Exchange to fund the 
cost of this regulation of the marketplace.
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    \11\ The Exchange does not assess a Customer any transaction 
fees in Multiply Listed Options, except in SPY, and pays Customer 
rebates.
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    Also, all members will continue to receive advance notice of 
changes to the ORF.

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 does not believe 
that adjusting its ORF creates an undue burden on inter-market or 
intra-market competition. The Exchange will adjust its ORF for all 
members on all of their transactions that clear as Customer at OCC. The 
Exchange is obligated to

[[Page 52075]]

ensure that the amount of regulatory revenue collected from the ORF, in 
combination with its other regulatory fees and fines, does not exceed 
regulatory costs. Additionally, the dues and fees paid by members go 
into the general funds of the Exchange, a portion of which is used to 
help pay the costs of regulation. The Exchange's members are subject to 
ORF on other options markets.\12\
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    \12\ For example, see the Chicago Board Options Exchange, 
Incorporated's Fees Schedule and the International Securities 
Exchange, LLC's Fee Schedule.
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    The Exchange does not believe that removing the limit to amend the 
ORF semi-annually, with advance notice, creates an undue burden on 
competition. The Exchange will continue to provide the same advance 
notice of changes to the ORF as it does today.

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.\13\ 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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    \13\ 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 [email protected]. Please include 
File Number SR-Phlx-2015-71 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-2015-71. 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 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-2015-71 and should be 
submitted on or before September 17, 2015.
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    \14\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\14\
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-21208 Filed 8-26-15; 8:45 am]
 BILLING CODE 8011-01-P



                                                                            Federal Register / Vol. 80, No. 166 / Thursday, August 27, 2015 / Notices                                                     52073

                                                 For the Commission, by the Division of                 proposed rule change. The text of these                 charged for member proprietary options
                                               Investment Management, under delegated                   statements may be examined at the                       transactions because members incur the
                                               authority.                                               places specified in Item IV below. The                  costs of owning memberships and
                                               Robert W. Errett,                                        Exchange has prepared summaries, set                    through their memberships are charged
                                               Deputy Secretary.                                        forth in sections A, B, and C below, of                 transaction fees, dues and other fees that
                                               [FR Doc. 2015–21206 Filed 8–26–15; 8:45 am]              the most significant aspects of such                    are not applicable to non-members. The
                                               BILLING CODE 8011–01–P                                   statements.                                             dues and fees paid by members go into
                                                                                                        A. Self-Regulatory Organization’s                       the general funds of the Exchange, a
                                                                                                        Statement of the Purpose of, and                        portion of which is used to help pay the
                                               SECURITIES AND EXCHANGE                                                                                          costs of regulation. The ORF is collected
                                                                                                        Statutory Basis for, the Proposed Rule
                                               COMMISSION                                                                                                       indirectly from members through their
                                                                                                        Change
                                               [Release No. 34–75749; File No. SR–Phlx–                                                                         clearing firms by OCC on behalf of the
                                               2015–71]
                                                                                                        1. Purpose                                              Exchange.
                                                                                                           The purpose of the proposed rule                        The ORF is designed to recover a
                                               Self-Regulatory Organizations;                           change is to: (1) Decrease the ORF from                 portion of the costs to the Exchange of
                                               NASDAQ OMX PHLX LLC; Notice of                           $0.0045 per to $0.0035 as of September                  the supervision and regulation of its
                                               Filing and Immediate Effectiveness of                    1, 2015 and increase the ORF from                       members, including performing routine
                                               Proposed Rule Change To Amend the                        $0.0035 to $0.0040 as of February 1,                    surveillances, investigations,
                                               Options Regulatory Fee                                   2016 to account for additional fine                     examinations, financial monitoring, and
                                                                                                        revenue, cost reductions and to balance                 policy, rulemaking, interpretive, and
                                               August 21, 2015.                                                                                                 enforcement activities. The Exchange
                                                                                                        the Exchange’s regulatory revenue
                                                  Pursuant to Section 19(b)(1) of the                   against the anticipated costs and                       believes that revenue generated from the
                                               Securities Exchange Act of 1934                          potential fines; and (2) remove the                     ORF, when combined with all of the
                                               (‘‘Act’’),1 and Rule 19b–4 thereunder,2                  requirement that the ORF may only be                    Exchange’s other regulatory fees, will
                                               notice is hereby given that, on August                   modified semi-annually.                                 cover a material portion, but not all, of
                                               17, 2015, NASDAQ OMX PHLX LLC                                                                                    the Exchange’s regulatory costs. The
                                               (‘‘Phlx’’ or ‘‘Exchange’’) filed with the                Background                                              Exchange will continue to monitor the
                                               Securities and Exchange Commission                          The ORF is assessed to each member                   amount of revenue collected from the
                                               (‘‘SEC’’ or ‘‘Commission’’) the proposed                 for all options transactions executed or                ORF to ensure that it, in combination
                                               rule change as described in Items I, II,                 cleared by the member that are cleared                  with its other regulatory fees and fines,
                                               and III, below, which Items have been                    at The Options Clearing Corporation                     do not exceed regulatory costs. If the
                                               prepared by the Exchange. The                            (‘‘OCC’’) in the Customer range (i.e., that             Exchange determines regulatory
                                               Commission is publishing this notice to                  clear in the Customer account of the                    revenues exceed regulatory costs, the
                                               solicit comments on the proposed rule                    member’s clearing firm at OCC). The                     Exchange will adjust the ORF by
                                               change from interested persons.                          Exchange monitors the amount of                         submitting a fee change filing to the
                                               I. Self-Regulatory Organization’s                        revenue collected from the ORF to                       Commission.
                                               Statement of the Terms of Substance of                   ensure that it, in combination with other
                                                                                                        regulatory fees and fines, does not                     ORF Adjustments
                                               the Proposed Rule Change
                                                                                                        exceed regulatory costs. The ORF is                       The Exchange is proposing to
                                                  The Exchange proposes to make                         imposed upon all transactions executed                  decrease the ORF from $0.0045 to
                                               adjustments to its Options Regulatory                    by a member, even if such transactions                  $0.0035 as of September 1, 2015 and
                                               Fee (‘‘ORF’’) by amending Section IV,                    do not take place on the Exchange.3 The                 increase the ORF from $0.0035 to
                                               Part D of the Pricing Schedule.                          ORF also includes options transactions                  $0.0040 as of February 1, 2016 in order
                                                  While changes to the Pricing                          that are not executed by an Exchange                    to account for regulatory revenue from
                                               Schedule pursuant to this proposal are                   member but are ultimately cleared by an                 disciplinary actions taken by the
                                               effective upon filing, the Exchange has                  Exchange member.4 The ORF is not                        Exchange. The Exchange regularly
                                               designated these changes to be operative                                                                         reviews its ORF to ensure that the ORF,
                                               September 1, 2015 and February 1,                           3 The ORF applies to all ‘‘C’’ account origin code
                                                                                                                                                                in combination with its other regulatory
                                               2016, as noted herein.                                   orders executed by a member on the Exchange.
                                                                                                                                                                fees and fines, do not exceed regulatory
                                                  The text of the proposed rule change                  Exchange Rules require each member to record the
                                                                                                        appropriate account origin code on all orders at the    costs. The Exchange believes that
                                               is available on the Exchange’s Web site                  time of entry in order to allow the Exchange to         decreasing the ORF by $0.0010 from
                                               at http://                                               properly prioritize and route orders and assess         September 1, 2015 through January 31,
                                               nasdaqomxphlx.cchwallstreet.com/, at                     transaction fees pursuant to the Rules of the
                                                                                                        Exchange and report resulting transactions to OCC.      2016 and then adjusting the ORF as of
                                               the principal office of the Exchange, and                See Exchange Rule 1063, Responsibilities of Floor       February 1, 2016 to $.0040 (a $0.0005
                                               at the Commission’s Public Reference                     Brokers, and Options Floor Procedure Advice F–4,        reduction from the current rates), will
                                               Room.                                                    Orders Executed as Spreads, Straddles,                  permit the Exchange to cover a material
                                                                                                        Combinations or Synthetics and Other Order Ticket
                                               II. Self-Regulatory Organization’s                       Marking Requirements. The Exchange represents           portion of its regulatory costs, while not
                                               Statement of the Purpose of, and                         that it has surveillances in place to verify that       exceeding regulatory costs.
                                                                                                        members mark orders with the correct account
                                               Statutory Basis for, the Proposed Rule                   origin code.                                            Semi-Annual Changes to ORF
                                               Change                                                      4 In the case where one member both executes a

                                                                                                        transaction and clears the transaction, the ORF is
                                                                                                                                                                   The Exchange previously filed a rule
                                                 In its filing with the Commission, the
rmajette on DSK2VPTVN1PROD with NOTICES




                                                                                                        assessed to the member only once on the execution.      change to Section IV, Part D of the
                                               Exchange included statements                             In the case where one member executes a                 Pricing Schedule to specify the
                                               concerning the purpose of and basis for                  transaction and a different member clears the           frequency with which the Exchange
                                               the proposed rule change and discussed                   transaction, the ORF is assessed only to the member
                                                                                                                                                                may change the ORF.5 At that time, the
                                               any comments it received on the                          who executes the transaction and is not assessed to
                                                                                                        the member who clears the transaction. In the case
                                                                                                        where a non-member executes a transaction and a           5 See Securities Release No. 71569 (February 19,
                                                 1 15 U.S.C. 78s(b)(1).                                 member clears the transaction, the ORF is assessed      2014), 79 FR 10593 (February 25, 2014) (SR–Phlx–
                                                 2 17 CFR 240.19b–4.                                    to the member who clears the transaction.               2014–12).



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                                               52074                            Federal Register / Vol. 80, No. 166 / Thursday, August 27, 2015 / Notices

                                               Exchange amended the Pricing                                unfair discrimination between                         conduct.10 Additionally, the dues and
                                               Schedule to specify that the Exchange                       customers, issuers, brokers, or dealers.              fees paid by members go into the
                                               may only increase or decrease the ORF                          The Exchange believes that lowering                general funds of the Exchange, a portion
                                               semi-annually, and any such fee change                      the ORF from $0.0045 to $0.0035 as of                 of which is used to help pay the costs
                                               will be effective on the first business                     September 1, 2015 and then increasing                 of regulation.
                                               day of February or August.6 The                             the ORF from $0.0035 to $0.0040 as of                    The Exchange believes that the
                                               Exchange stated in that filing, ‘‘[i]n                      February 1, 2016 is reasonable because                proposed rule change to remove the
                                               addition to submitting a proposed rule                      the Exchange’s collection of ORF needs                limit to amend the ORF only semi-
                                               change to the Securities and Exchange                       to be balanced against the amount of                  annually, with advance notice, is
                                               Commission (‘‘Commission’’) as                              regulatory revenue collected by the                   reasonable because the Exchange will
                                               required by the Act to increase or                          Exchange. The Exchange believes that                  continue to provide market participants
                                               decrease the ORF, the Exchange will                         the proposed adjustments noted herein                 with thirty (30) days advance notice of
                                               notify participants via an Options                          will serve to balance the Exchange’s                  amending its ORF. Also, the Exchange
                                               Trader Alert of any anticipated change                      regulatory revenue against the                        is required to monitor the amount of
                                               in the amount of the fee at least 30                        anticipated regulatory costs. It is further           revenue collected from the ORF to
                                               calendar days prior to the effective date                   reasonable because both price changes                 ensure that it, in combination with its
                                               of the change.’’ 7                                          discussed herein represent a price                    other regulatory fees and fines, do not
                                                  The Exchange is proposing to                             reduction compared to the current rate                exceed regulatory costs. Therefore, the
                                               eliminate the requirement that its ORF                      of $0.0045.                                           Exchange believes it is reasonable to
                                               may be only increased or decreased                             The Exchange believes that lowering                remove the semi-annual limit to amend
                                               semi-annually because the Exchange                          the ORF from $0.0045 to $0.0035 as of                 its ORF in order to permit the Exchange
                                               believes it requires the flexibility to                     September 1, 2015 and then increasing                 to make amendments to its ORF as
                                                                                                           the ORF from $0.0035 to $0.0040 as of                 necessary to comply with the
                                               amend its ORF as needed to meet its
                                                                                                           February 1, 2016 is equitable and not                 Exchange’s obligations.
                                               regulatory requirements and adjust its
                                                                                                           unfairly discriminatory because these                    The Exchange believes that the
                                               ORF to account for the regulatory                                                                                 proposed rule change to remove the
                                               revenue that it receives and the costs                      adjustments would be applicable to all
                                                                                                           members on all of their transactions that             limit to amend the ORF only semi-
                                               that it incurs, as evidenced by the                                                                               annually, with advance notice, is
                                               adjustments proposed in this rule                           clear as Customer at OCC. In addition,
                                                                                                           the ORF seeks to recover the costs of                 equitable and not unfairly
                                               change. While the Exchange is                                                                                     discriminatory because it will apply in
                                               eliminating the requirement to adjust                       supervising and regulating members,
                                                                                                           including performing routine                          the same manner to all members that are
                                               only semi-annually, it will continue to                                                                           subject to the ORF. Moreover, the
                                               submit a rule proposal with the                             surveillances, investigations,
                                                                                                                                                                 Exchange believes that the proposed
                                               Commission for each modification to                         examinations, financial monitoring, and
                                                                                                                                                                 ORF is a small incremental cost for
                                               the ORF and notify participants via an                      policy, rulemaking, interpretive, and
                                                                                                                                                                 Customer executions.11 The Exchange
                                               Options Trader Alert of any anticipated                     enforcement activities. The ORF is not
                                                                                                                                                                 has in place a regulatory structure to
                                               change in the amount of the fee at least                    charged for member proprietary options
                                                                                                                                                                 surveil for, exam [sic] and monitor the
                                               thirty (30) calendar days prior to the                      transactions because members incur the
                                                                                                                                                                 marketplace for violations of Exchange
                                               effective date. The Exchange believes                       costs of owning memberships and
                                                                                                                                                                 Rules. The ORF assists the Exchange to
                                               that the prior notification to market                       through their memberships are charged
                                                                                                                                                                 fund the cost of this regulation of the
                                               participants will provide guidance on                       transaction fees, dues and other fees that
                                                                                                                                                                 marketplace.
                                               the timing of any changes to the ORF                        are not applicable to non-members.                       Also, all members will continue to
                                               and ensure market participants are                          Moreover, the Exchange believes the                   receive advance notice of changes to the
                                               prepared to configure their systems to                      ORF ensures fairness by assessing                     ORF.
                                               properly account for the ORF.                               higher fees to those members that
                                                                                                           require more Exchange regulatory                      B. Self-Regulatory Organization’s
                                                  While changes to the Pricing
                                                                                                           services based on the amount of                       Statement on Burden on Competition
                                               Schedule pursuant to this proposal are
                                               effective upon filing, the Exchange has                     Customer options business they                           The Exchange does not believe that
                                               designated these changes to be operative                    conduct. Regulating Customer trading                  the proposed rule change will impose
                                               September 1, 2015 and February 1,                           activity is more labor intensive and                  any burden on competition not
                                               2016, as noted herein.                                      requires greater expenditure of human                 necessary or appropriate in furtherance
                                                                                                           and technical resources than regulating               of the purposes of the Act. The
                                               2. Statutory Basis                                          non-Customer trading activity.                        Exchange does not believe that adjusting
                                                  The Exchange believes that the                           Surveillance, regulation and                          its ORF creates an undue burden on
                                               proposed rule change is consistent with                     examination of non-Customer trading                   inter-market or intra-market
                                               the provisions of Section 6 of the Act,8                    activity generally tends to be more                   competition. The Exchange will adjust
                                               in general, and with Section 6(b)(4) and                    automated and less labor intensive. As                its ORF for all members on all of their
                                               6(b)(5) of the Act,9 in particular, in that                 a result, the costs associated with                   transactions that clear as Customer at
                                               it provides for the equitable allocation                    administering the Customer component                  OCC. The Exchange is obligated to
                                               of reasonable dues, fees and other                          of the Exchange’s overall regulatory
                                               charges among members and issuers and                       program are anticipated to be higher                     10 The ORF is not charged for orders that clear in


                                               other persons using any facility or                         than the costs associated with                        categories other than the Customer range at OCC
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                                                                                                           administering the non-Customer                        (e.g., Market Maker orders) because members incur
                                               system that the Exchange operates or                                                                              the costs of memberships and through their
                                               controls, and is not designed to permit                     component of its regulatory program. As               memberships are charged transaction fees, dues and
                                                                                                           such, the Exchange proposes assessing                 other fees that go into the general funds of the
                                                 6 Id.
                                                                                                           higher fees to those members that will                Exchange, a portion of which is used to help pay
                                                                                                           require more Exchange regulatory                      the costs of regulation.
                                                 7 Id.                                                                                                              11 The Exchange does not assess a Customer any
                                                 8 15    U.S.C. 78f.                                       services based on the amount of                       transaction fees in Multiply Listed Options, except
                                                 9 15    U.S.C. 78f(b)(4) and (5).                         Customer options business they                        in SPY, and pays Customer rebates.



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                                                                           Federal Register / Vol. 80, No. 166 / Thursday, August 27, 2015 / Notices                                                52075

                                               ensure that the amount of regulatory                    Paper Comments                                         SECURITIES AND EXCHANGE
                                               revenue collected from the ORF, in                                                                             COMMISSION
                                               combination with its other regulatory                     • Send paper comments in triplicate
                                               fees and fines, does not exceed                         to Secretary, Securities and Exchange
                                                                                                                                                              [Release No. 34–75750; File No. SR–
                                               regulatory costs. Additionally, the dues                Commission, 100 F Street NE.,                          NYSEArca–2015–72]
                                               and fees paid by members go into the                    Washington, DC 20549–1090.
                                               general funds of the Exchange, a portion                All submissions should refer to File                   Self-Regulatory Organizations; NYSE
                                               of which is used to help pay the costs                  Number SR–Phlx–2015–71. This file                      Arca, Inc.; Notice of Filing and
                                               of regulation. The Exchange’s members                   number should be included on the                       Immediate Effectiveness of Proposed
                                               are subject to ORF on other options                                                                            Rule Change Relating to the Use of
                                                                                                       subject line if email is used. To help the
                                               markets.12                                                                                                     Derivative Instruments by the SPDR
                                                                                                       Commission process and review your
                                                 The Exchange does not believe that                                                                           Blackstone/GSO Senior Loan ETF
                                                                                                       comments more efficiently, please use
                                               removing the limit to amend the ORF
                                               semi-annually, with advance notice,                     only one method. The Commission will                   August 21, 2015.
                                               creates an undue burden on                              post all comments on the Commission’s                     Pursuant to section 19(b)(1) 1 of the
                                               competition. The Exchange will                          Internet Web site (http://www.sec.gov/                 Securities Exchange Act of 1934 (the
                                               continue to provide the same advance                    rules/sro.shtml). Copies of the                        ‘‘Act’’) 2 and Rule 19b–4 thereunder,3
                                               notice of changes to the ORF as it does                 submission, all subsequent                             notice is hereby given that, on August
                                               today.                                                  amendments, all written statements                     11, 2015, NYSE Arca, Inc. (the
                                                                                                       with respect to the proposed rule                      ‘‘Exchange’’ or ‘‘NYSE Arca’’) filed with
                                               C. Self-Regulatory Organization’s                       change that are filed with the                         the Securities and Exchange
                                               Statement on Comments on the                            Commission, and all written                            Commission (the ‘‘Commission’’) the
                                               Proposed Rule Change Received From                      communications relating to the                         proposed rule change as described in
                                               Members, Participants, or Others
                                                                                                       proposed rule change between the                       Items I and II below, which Items have
                                                 No written comments were either                       Commission and any person, other than                  been prepared by the self-regulatory
                                               solicited or received.                                  those that may be withheld from the                    organization. The Commission is
                                                                                                       public in accordance with the                          publishing this notice to solicit
                                               III. Date of Effectiveness of the
                                                                                                       provisions of 5 U.S.C. 552, will be                    comments on the proposed rule change
                                               Proposed Rule Change and Timing for
                                                                                                       available for Web site viewing and                     from interested persons.
                                               Commission Action
                                                                                                       printing in the Commission’s Public                    I. Self-Regulatory Organization’s
                                                  The foregoing rule change has become                 Reference Room, 100 F Street NE.,
                                               effective pursuant to Section                                                                                  Statement of the Terms of Substance of
                                                                                                       Washington, DC 20549, on official                      the Proposed Rule Change
                                               19(b)(3)(A)(ii) of the Act.13 At any time
                                                                                                       business days between the hours of
                                               within 60 days of the filing of the                                                                               The Exchange proposes to reflect a
                                                                                                       10:00 a.m. and 3:00 p.m. Copies of the
                                               proposed rule change, the Commission                                                                           change to the means of achieving the
                                                                                                       filing also will be available for
                                               summarily may temporarily suspend                                                                              investment objective applicable to the
                                               such rule change if it appears to the                   inspection and copying at the principal
                                                                                                       office of the Exchange. All comments                   SPDR Blackstone/GSO Senior Loan ETF
                                               Commission that such action is                                                                                 (the ‘‘Fund’’) relating to its use of
                                               necessary or appropriate in the public                  received will be posted without change;
                                                                                                                                                              derivative instruments. Shares of the
                                               interest, for the protection of investors,              the Commission does not edit personal
                                                                                                                                                              Fund are currently listed and traded on
                                               or otherwise in furtherance of the                      identifying information from
                                                                                                                                                              the Exchange under NYSE Arca Equities
                                               purposes of the Act. If the Commission                  submissions. You should submit only
                                                                                                                                                              Rule 8.600 (‘‘Managed Fund Shares’’).
                                               takes such action, the Commission shall                 information that you wish to make                      The text of the proposed rule change is
                                               institute proceedings to determine                      available publicly. All submissions                    available on the Exchange’s Web site at
                                               whether the proposed rule should be                     should refer to File Number SR–Phlx–                   www.nyse.com, at the principal office of
                                               approved or disapproved.                                2015–71 and should be submitted on or                  the Exchange, and at the Commission’s
                                                                                                       before September 17, 2015.                             Public Reference Room.
                                               IV. Solicitation of Comments
                                                                                                         For the Commission, by the Division of               II. Self-Regulatory Organization’s
                                                 Interested persons are invited to                     Trading and Markets, pursuant to delegated
                                               submit written data, views and                                                                                 Statement of the Purpose of, and
                                                                                                       authority.14
                                               arguments concerning the foregoing,                                                                            Statutory Basis for, the Proposed Rule
                                                                                                       Robert W. Errett,                                      Change
                                               including whether the proposed rule
                                               change is consistent with the Act.                      Deputy Secretary.
                                                                                                       [FR Doc. 2015–21208 Filed 8–26–15; 8:45 am]
                                                                                                                                                                In its filing with the Commission, the
                                               Comments may be submitted by any of
                                                                                                                                                              self-regulatory organization included
                                               the following methods:                                  BILLING CODE 8011–01–P
                                                                                                                                                              statements concerning the purpose of,
                                               Electronic Comments                                                                                            and basis for, the proposed rule change
                                                                                                                                                              and discussed any comments it received
                                                 • Use the Commission’s Internet
                                                                                                                                                              on the proposed rule change. The text
                                               comment form (http://www.sec.gov/
                                                                                                                                                              of those statements may be examined at
                                               rules/sro.shtml); or
                                                                                                                                                              the places specified in Item IV below.
                                                 • Send an email to rule-comments@
                                                                                                                                                              The Exchange has prepared summaries,
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                                               sec.gov. Please include File Number SR–
                                                                                                                                                              set forth in sections A, B, and C below,
                                               Phlx–2015–71 on the subject line.
                                                                                                                                                              of the most significant parts of such
                                                 12 For example, see the Chicago Board Options
                                                                                                                                                              statements.
                                               Exchange, Incorporated’s Fees Schedule and the
                                                                                                                                                                1 15 U.S.C. 78s(b)(1).
                                               International Securities Exchange, LLC’s Fee
                                               Schedule.                                                                                                        2 15 U.S.C. 78a.
                                                 13 15 U.S.C. 78s(b)(3)(A)(ii).                          14 17   CFR 200.30–3(a)(12).                           3 17 CFR 240.19b–4.




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Document Created: 2015-12-15 10:53:07
Document Modified: 2015-12-15 10:53:07
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionNotices
FR Citation80 FR 52073 

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