80 FR 78797 - Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to the Exchange's Pricing Schedule Under Section VIII With Respect to Execution and Routing of Orders in Securities Priced at $1 or More Per Share
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 80, Issue 242 (December 17, 2015)
Federal Register Volume 80, Issue 242 (December 17, 2015)
| Page Range | 78797-78799 | |
| FR Document | 2015-31687 |
[Federal Register Volume 80, Number 242 (Thursday, December 17, 2015)] [Notices] [Pages 78797-78799] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2015-31687] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-76631; File No. SR-Phlx-2015-98] Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to the Exchange's Pricing Schedule Under Section VIII With Respect to Execution and Routing of Orders in Securities Priced at $1 or More Per Share December 11, 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 November 30, 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. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 17 CFR 240.19b-4. --------------------------------------------------------------------------- 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 under Section VIII, entitled ``NASDAQ OMX PSX FEES,'' with respect to execution and routing of orders in securities priced at $1 or more per share. While the changes proposed herein are effective upon filing, the Exchange has designated the amendments become operative on December 1, 2015. 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 amend certain charges and fees for order execution and routing applicable to the use of the order execution and routing services of the NASDAQ OMX PSX System (``PSX'') by member organizations for all securities traded at $1 or more per share. Specifically, under subparagraph (a)(1) of the rule the Exchange is proposing to increase the charges assessed member organizations that enter orders that execute in PSX. First, the Exchange is proposing to increase the charge for executions in Nasdaq-listed securities from $0.0028 to $0.0029 per share executed. Second, the Exchange is proposing to increase the charge for executions in NYSE-listed securities from $0.0027 to $0.0028 per share executed. Lastly, the Exchange is proposing to increase the charge for executions in securities listed on exchanges other than Nasdaq and NYSE from $0.0026 to $0.0028 per share executed. The Exchange is also proposing to increase credits provided to member organizations that provide displayed liquidity through PSX under subparagraph (a)(1) of the rule. First, the Exchange is proposing to increase the credit provided for Quotes/Orders entered by a member organization that provides and accesses 0.35% or more of Consolidated Volume during the month from $0.0028 to $0.0031 per share executed. Second, the Exchange is proposing to increase the credit provided for Quotes/Orders entered by a member organization that provides and accesses 0.25% or more of Consolidated Volume during the month from $0.0027 to $0.0029 per share executed. Lastly, the Exchange is eliminating the $0.0023 per share executed credit provided for Quotes/ Orders entered by a member organization that provides and accesses daily volume of 100,000 or more shares during the month, and is increasing the ``default'' credit (i.e., the credit received for providing displayed liquidity that does not otherwise qualify for a higher credit) provided for all other Quotes/Orders from $0.0020 to $0.0023 per share executed. Finally, the Exchange is proposing to eliminate text from subparagraph (a) of the rule that defines the term ``regular market hours,'' which was erroneously left in the rule text when the tier it provided reference to was deleted. Currently, no fee or credit references the definition. Thus, the Exchange is proposing to delete the reference. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with the provisions of Section 6 of the Act,\3\ in general, and with Sections 6(b)(4) and 6(b)(5) of the Act,\4\ 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 which Nasdaq operates or controls and is designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable [[Page 78798]] principles of trade, to foster cooperation and coordination with persons engaged in regulating, clearing, settling, processing information with respect to, and facilitating transactions in securities, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest; and are not designed to permit unfair discrimination between customers, issuers, brokers, or dealers. --------------------------------------------------------------------------- \3\ 15 U.S.C. 78f. \4\ 15 U.S.C. 78f(b)(4) and (5). --------------------------------------------------------------------------- The Commission and the courts have repeatedly expressed their preference for competition over regulatory intervention in determining prices, products, and services in the securities markets. In Regulation NMS, for example, the Commission indicated that market forces should generally determine the price of non-core market data because national market system regulation ``has been remarkably successful in promoting market competition in its broader forms that are most important to investors and listed companies.'' \5\ Likewise, in NetCoalition v. NYSE Arca, Inc., 615 F.3d 525 (D.C. Cir. 2010), the D.C. Circuit upheld the Commission's use of a market-based approach in evaluating the fairness of market data fees against a challenge claiming that Congress mandated a cost-based approach.\6\ As the court emphasized, the Commission ``intended in Regulation NMS that `market forces, rather than regulatory requirements' play a role in determining the market data . . . to be made available to investors and at what cost.'' \7\ --------------------------------------------------------------------------- \5\ See Exchange Act Release No. 34-51808 (June 9, 2005) (``Regulation NMS Adopting Release''). \6\ See NetCoalition, 615 F.3d at 534. \7\ Id. at 537. --------------------------------------------------------------------------- Further, ``[n]o one disputes that competition for order flow is `fierce.' . . . As the SEC explained, `[i]n the U.S. national market system, buyers and sellers of securities, and the broker-dealers that act as their order-routing agents, have a wide range of choices of where to route orders for execution'; [and] `no exchange can afford to take its market share percentages for granted' because `no exchange possesses a monopoly, regulatory or otherwise, in the execution of order flow from broker dealers' . . . .'' \8\ --------------------------------------------------------------------------- \8\ NetCoalition, 615 F.3d at 539 (quoting ArcaBook Order, 73 FR at 74782-74783). --------------------------------------------------------------------------- The proposed increases to the credits and charges in the fee schedule under the Exchange's Pricing Schedule under Section VIII are reflective of the Exchange's ongoing efforts to use pricing incentives to attract order flow to the Exchange and improve market quality. The goal of these pricing incentives is to provide meaningful incentives for members to increase their participation on the Exchange. The Exchange is proposing to increase the charges to a member organization entering an order that executes in PSX and is also proposing to increase credits provided to member organizations. As a general principle, the Exchange must, from time to time, adjust the level of fees and credits provided to most efficiently allocate reduced fees and credits in terms of market improving behavior. In this regard, the Exchange is limited in how far it may reduce fees and in the amount of credits that it can provide to market participants. The Exchange believes that the increases to the charges assessed a member organization entering an order that executes in PSX are reasonable because they reflect the Exchange's need to adjust its credits and fees in response to the costs and benefits provided by the Exchange. In addition to covering Exchange costs, the increased fees will allow the Exchange to offer credits to market participants that provide beneficial liquidity to PSX, to the benefit of all of its participants. The Exchange notes that it is increasing the charge assessed for executions in securities listed on exchanges other than Nasdaq and NYSE by a greater amount than for securities listed on Nasdaq and NYSE because it still wishes to offer lower fees for removal of liquidity for securities not listed on Nasdaq while balancing the exchanges' fees with its credits. The Exchange believes that the proposed increases to the charges assessed a member organization entering an order that executes in PSX are consistent with an equitable allocation of fees and are not unfairly discriminatory because they apply to all member organizations that enter orders in the securities based on the listing venue of the security. The Exchange believes that the proposed increases to the credits provided to a member organization that provides displayed liquidity through PSX are reasonable because the Exchange seeks to improve market quality by providing increased incentives to market participants to provide beneficial displayed liquidity. To achieve this, the Exchange must, from time to time, adjust the levels of credits and the related qualification requirements in reaction to market behavior. In the present case, the Exchange is proposing to increase two of the credit tiers, eliminate the lowest credit tier, and increase the ``default'' credit to the level of the eliminated credit tier. The Exchange believes providing the greatest incentive to market participants that also provide and access the highest level of Consolidated Volume during the month may significantly increase the number of member organizations that provide such high levels of market improving participation, to the benefit of all participants. Elimination of the credit tier and increasing the level of the default credit to the level of the eliminated tier is reasonable as it is reflective of the Exchange's desire to make PSX an attractive venue to any member organization that is willing to provide displayed liquidity. The Exchange believes that the proposed increases to the credits provided for displayed liquidity through PSX and elimination of a credit tier are consistent with an equitable allocation of fees and are not unfairly discriminatory because they apply to all member organizations that provide displayed liquidity through PSX and meet the criteria of the credit tier. In addition, member organizations that previously would have qualified under the eliminated tier would continue to receive the same credit under the ``default'' credit tier. The Exchange believes that the elimination of rule text that defines a term no longer used in the fee schedule is consistent with the protection of investors and the public interest because it will avoid investor confusion that may occur by including it. B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange does not believe that the proposed rule changes will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act, as amended.\9\ Phlx notes that it operates in a highly competitive market in which market participants can readily favor dozens of different competing exchanges and alternative trading systems if they deem charges at a particular venue to be excessive, or credit opportunities available at other venues to be more favorable. In such an environment, the Exchange must continually adjust its charges and credits to remain competitive with other exchanges. Because competitors are free to modify their own charges and credits in response, and because market participants may readily adjust their order routing practices, the Exchange believes that the degree to which changes to charges and credits in this market may impose any burden on competition is extremely limited. --------------------------------------------------------------------------- \9\ 15 U.S.C. 78f(b)(8). --------------------------------------------------------------------------- [[Page 78799]] In this instance, the changes to charges and credits do not impose a burden on competition because the Exchange membership is optional and is the subject of competition from other exchanges. The increased credits and charges are reflective of the intent to increase the order flow on the Exchange. For these reasons, the Exchange does not believe that any of the proposed changes will impair the ability of members or competing order execution venues to maintain their competitive standing in the financial markets. Moreover, because there are numerous competitive alternatives to the use of the Exchange, it is likely that the Exchange will lose market share as a result of the changes if they are unattractive to market participants. Accordingly, the Exchange does not believe that the proposed rule changes will impair the ability of members or competing order execution venues to maintain their competitive standing in the financial markets. 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\ 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. --------------------------------------------------------------------------- \10\ 15 U.S.C. 78s(b)(3)(A)(ii). --------------------------------------------------------------------------- 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 CommentsUse 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-2015-98 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-2015-98. 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 (https://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-2015-98 and should be submitted on or before January 7, 2016. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\11\ --------------------------------------------------------------------------- \11\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Robert W. Errett, Deputy Secretary. [FR Doc. 2015-31687 Filed 12-16-15; 8:45 am] BILLING CODE 8011-01-P
![Federal Register / Vol. 80, No. 242 / Thursday, December 17, 2015 / Notices 78797
from the introduction of FTSE 100 30, 2015, NASDAQ OMX PHLX LLC listed securities from $0.0028 to $0.0029
Index options. (‘‘Phlx’’ or ‘‘Exchange’’) filed with the per share executed. Second, the
As a national securities exchange, the Securities and Exchange Commission Exchange is proposing to increase the
Exchange is required, under Section (‘‘SEC’’ or ‘‘Commission’’) the proposed charge for executions in NYSE-listed
6(b)(1) of the Act,19 to enforce rule change as described in Items I, II, securities from $0.0027 to $0.0028 per
compliance by its members, and persons and III, below, which Items have been share executed. Lastly, the Exchange is
associated with its members, with the prepared by the Exchange. The proposing to increase the charge for
provisions of the Act, Commission rules Commission is publishing this notice to executions in securities listed on
and regulations thereunder, and its own solicit comments on the proposed rule exchanges other than Nasdaq and NYSE
rules. As noted above, the Exchange change from interested persons. from $0.0026 to $0.0028 per share
states that, except as modified by the executed.
proposal, Exchange Rules in Chapters I I. Self-Regulatory Organization’s The Exchange is also proposing to
through XIX, XXIV, XXIVA, and XXIVB Statement of the Terms of Substance of increase credits provided to member
would equally apply to FTSE 100 Index the Proposed Rule Change organizations that provide displayed
options. The Exchange also states that The Exchange proposes to amend the liquidity through PSX under
FTSE 100 Index options would be Exchange’s Pricing Schedule under subparagraph (a)(1) of the rule. First, the
subject to the same rules that currently Section VIII, entitled ‘‘NASDAQ OMX Exchange is proposing to increase the
govern other CBOE index options, PSX FEES,’’ with respect to execution credit provided for Quotes/Orders
including sales practice rules, margin and routing of orders in securities entered by a member organization that
requirements, and trading rules. priced at $1 or more per share. provides and accesses 0.35% or more of
The Commission further believes that While the changes proposed herein Consolidated Volume during the month
the Exchange’s proposed position and are effective upon filing, the Exchange from $0.0028 to $0.0031 per share
exercise limits, trading hours, margin, has designated the amendments become executed. Second, the Exchange is
strike price intervals, minimum tick operative on December 1, 2015. proposing to increase the credit
size, series openings, and other aspects The text of the proposed rule change provided for Quotes/Orders entered by
of the proposed rule change, as is available on the Exchange’s Web site a member organization that provides
modified by Amendment No. 1, are at http://nasdaqomxphlx. and accesses 0.25% or more of
appropriate and consistent with the Act. cchwallstreet.com/, at the principal Consolidated Volume during the month
office of the Exchange, and at the from $0.0027 to $0.0029 per share
IV. Conclusion executed. Lastly, the Exchange is
Commission’s Public Reference Room.
It is therefore ordered, pursuant to eliminating the $0.0023 per share
Section 19(b)(2) of the Act,20 that the II. Self-Regulatory Organization’s executed credit provided for Quotes/
proposed rule change (SR–CBOE–2015– Statement of the Purpose of, and Orders entered by a member
100), as modified by Amendment No. 1, Statutory Basis for, the Proposed Rule organization that provides and accesses
be, and hereby is, approved. Change daily volume of 100,000 or more shares
For the Commission, by the Division of In its filing with the Commission, the during the month, and is increasing the
Trading and Markets, pursuant to delegated Exchange included statements ‘‘default’’ credit (i.e., the credit received
authority.21 concerning the purpose of and basis for for providing displayed liquidity that
Robert W. Errett, the proposed rule change and discussed does not otherwise qualify for a higher
Deputy Secretary. any comments it received on the credit) provided for all other Quotes/
[FR Doc. 2015–31685 Filed 12–16–15; 8:45 am] proposed rule change. The text of these Orders from $0.0020 to $0.0023 per
statements may be examined at the share executed.
BILLING CODE 8011–01–P
places specified in Item IV below. The Finally, the Exchange is proposing to
Exchange has prepared summaries, set eliminate text from subparagraph (a) of
SECURITIES AND EXCHANGE forth in sections A, B, and C below, of the rule that defines the term ‘‘regular
COMMISSION the most significant aspects of such market hours,’’ which was erroneously
statements. left in the rule text when the tier it
[Release No. 34–76631; File No. SR–Phlx– provided reference to was deleted.
2015–98] A. Self-Regulatory Organization’s Currently, no fee or credit references the
Statement of the Purpose of, and definition. Thus, the Exchange is
Self-Regulatory Organizations; Statutory Basis for, the Proposed Rule proposing to delete the reference.
NASDAQ OMX PHLX LLC; Notice of Change
Filing and Immediate Effectiveness of 2. Statutory Basis
Proposed Rule Change Relating to the 1. Purpose
The Exchange believes that the
Exchange’s Pricing Schedule Under The purpose of the proposed rule proposed rule change is consistent with
Section VIII With Respect to Execution change is to amend certain charges and the provisions of Section 6 of the Act,3
and Routing of Orders in Securities fees for order execution and routing in general, and with Sections 6(b)(4) and
Priced at $1 or More Per Share applicable to the use of the order 6(b)(5) of the Act,4 in particular, in that
December 11, 2015.
execution and routing services of the it provides for the equitable allocation
NASDAQ OMX PSX System (‘‘PSX’’) by of reasonable dues, fees and other
Pursuant to Section 19(b)(1) of the
member organizations for all securities
asabaliauskas on DSK5VPTVN1PROD with NOTICES
Securities Exchange Act of 1934 charges among members and issuers and
traded at $1 or more per share. other persons using any facility or
(‘‘Act’’),1 and Rule 19b–4 thereunder,2
Specifically, under subparagraph system which Nasdaq operates or
notice is hereby given that on November
(a)(1) of the rule the Exchange is controls and is designed to prevent
19 15 U.S.C. 78f(b)(1).
proposing to increase the charges fraudulent and manipulative acts and
20 15 U.S.C. 78s(b)(2). assessed member organizations that practices, to promote just and equitable
21 17 CFR 200.30–3(a)(12). enter orders that execute in PSX. First,
1 15 U.S.C. 78s(b)(1). the Exchange is proposing to increase 3 15 U.S.C. 78f.
2 17 CFR 240.19b–4. the charge for executions in Nasdaq- 4 15 U.S.C. 78f(b)(4) and (5).
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principles of trade, to foster cooperation quality. The goal of these pricing providing the greatest incentive to
and coordination with persons engaged incentives is to provide meaningful market participants that also provide
in regulating, clearing, settling, incentives for members to increase their and access the highest level of
processing information with respect to, participation on the Exchange. Consolidated Volume during the month
and facilitating transactions in The Exchange is proposing to increase may significantly increase the number
securities, to remove impediments to the charges to a member organization of member organizations that provide
and perfect the mechanism of a free and entering an order that executes in PSX such high levels of market improving
open market and a national market and is also proposing to increase credits participation, to the benefit of all
system, and, in general, to protect provided to member organizations. As a participants. Elimination of the credit
investors and the public interest; and general principle, the Exchange must, tier and increasing the level of the
are not designed to permit unfair from time to time, adjust the level of default credit to the level of the
discrimination between customers, fees and credits provided to most eliminated tier is reasonable as it is
issuers, brokers, or dealers. efficiently allocate reduced fees and reflective of the Exchange’s desire to
The Commission and the courts have credits in terms of market improving make PSX an attractive venue to any
repeatedly expressed their preference behavior. In this regard, the Exchange is member organization that is willing to
for competition over regulatory limited in how far it may reduce fees provide displayed liquidity. The
intervention in determining prices, and in the amount of credits that it can Exchange believes that the proposed
products, and services in the securities provide to market participants. increases to the credits provided for
markets. In Regulation NMS, for The Exchange believes that the displayed liquidity through PSX and
example, the Commission indicated that increases to the charges assessed a elimination of a credit tier are consistent
market forces should generally member organization entering an order with an equitable allocation of fees and
determine the price of non-core market that executes in PSX are reasonable are not unfairly discriminatory because
data because national market system because they reflect the Exchange’s need they apply to all member organizations
regulation ‘‘has been remarkably to adjust its credits and fees in response that provide displayed liquidity through
successful in promoting market to the costs and benefits provided by the PSX and meet the criteria of the credit
competition in its broader forms that are Exchange. In addition to covering tier. In addition, member organizations
most important to investors and listed Exchange costs, the increased fees will that previously would have qualified
companies.’’ 5 Likewise, in NetCoalition allow the Exchange to offer credits to under the eliminated tier would
v. NYSE Arca, Inc., 615 F.3d 525 (D.C. market participants that provide continue to receive the same credit
Cir. 2010), the D.C. Circuit upheld the beneficial liquidity to PSX, to the under the ‘‘default’’ credit tier.
Commission’s use of a market-based benefit of all of its participants. The
The Exchange believes that the
Exchange notes that it is increasing the
approach in evaluating the fairness of elimination of rule text that defines a
charge assessed for executions in
market data fees against a challenge term no longer used in the fee schedule
securities listed on exchanges other than
claiming that Congress mandated a cost- is consistent with the protection of
Nasdaq and NYSE by a greater amount
based approach.6 As the court investors and the public interest
than for securities listed on Nasdaq and
emphasized, the Commission ‘‘intended because it will avoid investor confusion
NYSE because it still wishes to offer
in Regulation NMS that ‘market forces, that may occur by including it.
lower fees for removal of liquidity for
rather than regulatory requirements’
securities not listed on Nasdaq while B. Self-Regulatory Organization’s
play a role in determining the market
balancing the exchanges’ fees with its Statement on Burden on Competition
data . . . to be made available to
credits. The Exchange believes that the
investors and at what cost.’’ 7 proposed increases to the charges The Exchange does not believe that
Further, ‘‘[n]o one disputes that assessed a member organization the proposed rule changes will result in
competition for order flow is ‘fierce.’ entering an order that executes in PSX any burden on competition that is not
. . . As the SEC explained, ‘[i]n the U.S. are consistent with an equitable necessary or appropriate in furtherance
national market system, buyers and allocation of fees and are not unfairly of the purposes of the Act, as amended.9
sellers of securities, and the broker- discriminatory because they apply to all Phlx notes that it operates in a highly
dealers that act as their order-routing member organizations that enter orders competitive market in which market
agents, have a wide range of choices of in the securities based on the listing participants can readily favor dozens of
where to route orders for execution’; venue of the security. different competing exchanges and
[and] ‘no exchange can afford to take its The Exchange believes that the alternative trading systems if they deem
market share percentages for granted’ proposed increases to the credits charges at a particular venue to be
because ‘no exchange possesses a provided to a member organization that excessive, or credit opportunities
monopoly, regulatory or otherwise, in provides displayed liquidity through available at other venues to be more
the execution of order flow from broker PSX are reasonable because the favorable. In such an environment, the
dealers’ . . . .’’ 8 Exchange seeks to improve market Exchange must continually adjust its
The proposed increases to the credits quality by providing increased charges and credits to remain
and charges in the fee schedule under incentives to market participants to competitive with other exchanges.
the Exchange’s Pricing Schedule under provide beneficial displayed liquidity. Because competitors are free to modify
Section VIII are reflective of the To achieve this, the Exchange must, their own charges and credits in
Exchange’s ongoing efforts to use from time to time, adjust the levels of response, and because market
asabaliauskas on DSK5VPTVN1PROD with NOTICES
pricing incentives to attract order flow credits and the related qualification participants may readily adjust their
to the Exchange and improve market requirements in reaction to market order routing practices, the Exchange
behavior. In the present case, the believes that the degree to which
5 See Exchange Act Release No. 34–51808 (June
Exchange is proposing to increase two changes to charges and credits in this
9, 2005) (‘‘Regulation NMS Adopting Release’’).
6 See NetCoalition, 615 F.3d at 534. of the credit tiers, eliminate the lowest market may impose any burden on
7 Id. at 537. credit tier, and increase the ‘‘default’’ competition is extremely limited.
8 NetCoalition, 615 F.3d at 539 (quoting ArcaBook credit to the level of the eliminated
Order, 73 FR at 74782–74783). credit tier. The Exchange believes 9 15 U.S.C. 78f(b)(8).
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![Federal Register / Vol. 80, No. 242 / Thursday, December 17, 2015 / Notices 78799
In this instance, the changes to • Send an email to rule-comments@ SECURITIES AND EXCHANGE
charges and credits do not impose a sec.gov. Please include File Number SR– COMMISSION
burden on competition because the Phlx–2015–98 on the subject line.
[Release No. 34–76632; File No. SR–CBOE–
Exchange membership is optional and is 2015–104]
the subject of competition from other Paper Comments
exchanges. The increased credits and • Send paper comments in triplicate Self-Regulatory Organizations;
charges are reflective of the intent to to Secretary, Securities and Exchange Chicago Board Options Exchange,
increase the order flow on the Exchange. Incorporated; Order Granting
Commission, 100 F Street NE.,
For these reasons, the Exchange does Accelerated Approval of a Proposed
Washington, DC 20549–1090.
not believe that any of the proposed Rule Change To Trade Expiring MSCI
changes will impair the ability of All submissions should refer to File EAFE Index Options Until 3:00 p.m.
members or competing order execution Number SR–Phlx–2015–98. This file
venues to maintain their competitive number should be included on the December 11, 2015.
standing in the financial markets. subject line if email is used. To help the I. Introduction
Moreover, because there are numerous Commission process and review your
competitive alternatives to the use of the On November 13, 2015, the Chicago
comments more efficiently, please use
Exchange, it is likely that the Exchange Board Options Exchange, Incorporated
only one method. The Commission will (the ‘‘Exchange’’ or ‘‘CBOE’’) filed with
will lose market share as a result of the post all comments on the Commission’s
changes if they are unattractive to the Securities and Exchange
Internet Web site (https://www.sec.gov/ Commission (the ‘‘Commission’’),
market participants. rules/sro-shtml). Copies of the
Accordingly, the Exchange does not pursuant to Section 19(b)(1) of the
submission, all subsequent Securities Exchange Act of 1934 (the
believe that the proposed rule changes
amendments, all written statements ‘‘Act’’) 1 and Rule 19b–4 thereunder,2 a
will impair the ability of members or
competing order execution venues to with respect to the proposed rule proposed rule change to change the
maintain their competitive standing in change that are filed with the trading hours for expiring MSCI EAFE
the financial markets. Commission, and all written Index (‘‘EAFE’’) options. This proposal
communications relating to the was published for comment in the
C. Self-Regulatory Organization’s proposed rule change between the Federal Register on November 25,
Statement on Comments on the Commission and any person, other than 2015.3 The Commission received no
Proposed Rule Change Received From those that may be withheld from the comments regarding the proposal. This
Members, Participants, or Others public in accordance with the order approves the proposed rule
No written comments were either provisions of 5 U.S.C. 552, will be change on an accelerated basis.
solicited or received. available for Web site viewing and II. Description of the Proposed Rule
III. Date of Effectiveness of the printing in the Commission’s Public Change
Proposed Rule Change and Timing for Reference Room, 100 F Street NE.,
Washington, DC 20549, on official The Exchange proposes to change the
Commission Action trading hours for expiring EAFE options
business days between the hours of
The foregoing rule change has become from 10:00 a.m. (Chicago time) on their
10:00 a.m. and 3:00 p.m. Copies of the
effective pursuant to Section expiration date to 3:00 p.m. (Chicago
filing also will be available for
19(b)(3)(A)(ii) of the Act.10 At any time time) on their expiration date. When the
within 60 days of the filing of the inspection and copying at the principal Exchange first listed EAFE options, the
proposed rule change, the Commission office of the Exchange. All comments MSCI EAFE Index was not calculated
summarily may temporarily suspend received will be posted without change; and disseminated during the entire time
such rule change if it appears to the the Commission does not edit personal period during which EAFE options were
Commission that such action is identifying information from traded on the Exchange. Accordingly,
necessary or appropriate in the public submissions. You should submit only the Exchange set the initial trading
interest, for the protection of investors, information that you wish to make hours for expiring EAFE options to align
or otherwise in furtherance of the available publicly. All submissions with expiring EAFE futures contracts
purposes of the Act. If the Commission should refer to File Number SR–Phlx– traded on the Intercontinental
takes such action, the Commission shall 2015–98 and should be submitted on or Exchange, Inc. (‘‘ICE’’), which stopped
institute proceedings to determine before January 7, 2016. trading at 10:00 a.m. (Chicago time) on
whether the proposed rule should be For the Commission, by the Division of the third Friday of the futures contracts
approved or disapproved. Trading and Markets, pursuant to delegated month.4
authority.11 The MSCI EAFE Index, however, will
IV. Solicitation of Comments
now be calculated and disseminated
Interested persons are invited to through the close of trading on U.S.
submit written data, views, and Robert W. Errett,
arguments concerning the foregoing, Deputy Secretary. 1 15 U.S.C. 78s(b)(1).
including whether the proposed rule [FR Doc. 2015–31687 Filed 12–16–15; 8:45 am] 2 17 CFR 240.19b–4.
change is consistent with the Act. BILLING CODE 8011–01–P
3 See Securities Exchange Act Release No. 76482
(November 19, 2015), 80 FR 73839 (‘‘Notice’’).
asabaliauskas on DSK5VPTVN1PROD with NOTICES
Comments may be submitted by any of 4 See Notice, supra note 3, at 73840. The
the following methods: Exchange established listing criteria that permits
Electronic Comments the trading of EAFE options ‘‘after trading in all
component securities has closed for the day and the
• Use the Commission’s Internet index level is no longer widely disseminated at
comment form (http://www.sec.gov/ least once every fifteen (15) seconds by one or more
major market data vendors, provided that EAFE
rules/sro.shtml); or futures contracts are trading and prices for those
contract may be used as a proxy for the current
10 15 U.S.C. 78s(b)(3)(A)(ii). 11 17 CFR 200.30–3(a)(12). index value.’’ See CBOE Rule 24.2.01(a)(8).
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Document Created: 2018-03-02 09:18:14
Document Modified: 2018-03-02 09:18:14
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Notices | |
| FR Citation | 80 FR 78797 |
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