82 FR 18795 - Self-Regulatory Organizations; NASDAQ PHLX LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the Pricing Schedule

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 82, Issue 76 (April 21, 2017)

Page Range		18795-18797
FR Document		2017-08062
Federal Register, Volume 82 Issue 76 (Friday, April 21, 2017)
[Federal Register Volume 82, Number 76 (Friday, April 21, 2017)]
[Notices]
[Pages 18795-18797]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-08062]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-80474; File No. SR-Phlx-2017-30]


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

April 17, 2017.
    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 April 7, 2017, NASDAQ 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 proposal [sic] to amend the Exchange's 
Pricing Schedule at Section B, entitled ``Customer Rebate Program,'' 
Section II, entitled ``Multiply Listed Options Fees,'' \3\ and Section 
IV, Part B entitled ``FLEX Transaction Fees'' \4\ to remove references 
to MNX.\5\
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    \3\ These fees include options overlying equities, ETFs, ETNs 
and indexes which are Multiply Listed.
    \4\ Multiply Listed Options includes options overlying equities, 
ETFs, ETNs and indexes which are Multiply Listed.
    \5\ MNX represents options on one-tenth the value of the Nasdaq 
100 Index traded under the symbol MNX (``MNX'').
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    The text of the proposed rule change is available on the Exchange's 
Web site at http://nasdaqphlx.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 the Exchange's 
Pricing Schedule at Section B, entitled ``Customer Rebate Program,'' 
Section II, entitled ``Multiply Listed Options Fees,'' and Section IV, 
Part B entitled ``FLEX Transaction Fees'' to remove references to MNX.
    The Exchange is delisting MNX on Phlx on April 7, 2017. As a result 
of delisting MNX, the Exchange is removing references from its Pricing 
Schedule to specific pricing for MNX. No market participant would be 
able to trade an option overlying MNX on Phlx once it is delisted.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act,\6\ in general, and furthers the objectives of Sections 
6(b)(4) and 6(b)(5) of the Act,\7\ 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, and is 
not designed to permit unfair discrimination between customers, 
issuers, brokers, or dealers.
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    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(4) and (5).
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    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, while adopting a series of steps to improve the current market 
model, the Commission highlighted the importance of market forces in 
determining prices and SRO revenues and, also, recognized that

[[Page 18796]]

current regulation of the market system ``has been remarkably 
successful in promoting market competition in its broader forms that 
are most important to investors and listed companies.'' \8\
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    \8\ Securities Exchange Act Release No. 51808 (June 9, 2005), 70 
FR 37496, 37499 (June 29, 2005) (``Regulation NMS Adopting 
Release'').
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    Likewise, in NetCoalition v. Securities and Exchange Commission \9\ 
(``NetCoalition'') 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.\10\ 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.'' \11\
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    \9\ NetCoalition v. SEC, 615 F.3d 525 (D.C. Cir. 2010).
    \10\ See NetCoalition, at 534-535.
    \11\ Id. at 537.
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    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' . . . .'' \12\ Although the court and 
the SEC were discussing the cash equities markets, the Exchange 
believes that these views apply with equal force to the options 
markets.
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    \12\ Id. at 539 (quoting Securities Exchange Act Release No. 
59039 (December 2, 2008), 73 FR 74770, 74782-83 (December 9, 2008) 
(SR-NYSEArca-2006-21)).
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    The Exchange's proposal to remove references from its Pricing 
Schedule to specific pricing for MNX is reasonable because the Exchange 
is delisting MNX on Phlx on April 7, 2017 and the specific pricing for 
MNX would not be applicable.
    The Exchange's proposal to remove references from its Pricing 
Schedule to specific pricing for MNX is equitable and not unfairly 
discriminatory because no market participant would be able to trade an 
option overlying MNX on Phlx once it is delisted.

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. In terms of inter-market 
competition, the Exchange notes that it operates in a highly 
competitive market in which market participants can readily favor 
competing venues if they deem fee levels at a particular venue to be 
excessive, or rebate opportunities available at other venues to be more 
favorable. In such an environment, the Exchange must continually adjust 
its fees to remain competitive with other exchanges and with 
alternative trading systems that have been exempted from compliance 
with the statutory standards applicable to exchanges. Because 
competitors are free to modify their own fees in response, and because 
market participants may readily adjust their order routing practices, 
the Exchange believes that the degree to which fee changes in this 
market may impose any burden on competition is extremely limited. In 
sum, if the changes proposed herein are unattractive to market 
participants, it is likely that the Exchange will lose market share as 
a result. Accordingly, the Exchange does not believe that the proposed 
changes will impair the ability of members or competing order execution 
venues to maintain their competitive standing in the financial markets.
    In terms of inter-market competition, the Exchange believes that 
its proposed rebates and fees continue to remain competitive in SPY and 
Multiply Listed Options. In sum, if the changes proposed herein are 
unattractive to market participants, it is likely that the Exchange 
will lose market share as a result. Accordingly, the Exchange does not 
believe that the proposed changes will impair the ability of members or 
competing order execution venues to maintain their competitive standing 
in the financial markets.
    The Exchange's proposal to remove references from its Pricing 
Schedule to specific pricing for MNX does not impose an undue burden on 
intra-market competition because no market participant would be able to 
trade an option overlying MNX on Phlx once it is delisted.

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\
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    \13\ 15 U.S.C. 78s(b)(3)(A)(ii).
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    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: (i) 
Necessary or appropriate in the public interest; (ii) for the 
protection of investors; or (iii) 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.

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-2017-30 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-Phlx-2017-30. 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.,

[[Page 18797]]

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-2017-30 and should be 
submitted on or before May 12, 2017.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\14\
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    \14\ 17 CFR 200.30-3(a)(12).
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Brent J. Fields,
Secretary.
[FR Doc. 2017-08062 Filed 4-20-17; 8:45 am]
BILLING CODE 8011-01-P
Federal Register / Vol. 82, No. 76 / Friday, April 21, 2017 / Notices 18795

within 60 days of the filing of the submissions. You should submit only Exchange, and at the Commission’s
proposed rule change, the Commission information that you wish to make Public Reference Room.
summarily may temporarily suspend available publicly. All submissions
II. Self-Regulatory Organization’s
such rule change if it appears to the should refer to File Number SR–
Statement of the Purpose of, and
Commission that such action is PEARL–2017–18, and should be
Statutory Basis for, the Proposed Rule
necessary or appropriate in the public submitted on or before May 12, 2017. Change
interest, for the protection of investors, For the Commission, by the Division of
or otherwise in furtherance of the Trading and Markets, pursuant to delegated
In its filing with the Commission, the
purposes of the Act. If the Commission authority.19 Exchange included statements
takes such action, the Commission shall concerning the purpose of and basis for
Brent J. Fields,
institute proceedings to determine the proposed rule change and discussed
Secretary.
whether the proposed rule should be any comments it received on the
[FR Doc. 2017–08058 Filed 4–20–17; 8:45 am] proposed rule change. The text of these
approved or disapproved.
BILLING CODE 8011–01–P statements may be examined at the
IV. Solicitation of Comments places specified in Item IV below. The
Interested persons are invited to Exchange has prepared summaries, set
submit written data, views, and SECURITIES AND EXCHANGE forth in sections A, B, and C below, of
arguments concerning the foregoing, COMMISSION the most significant aspects of such
including whether the proposed rule statements.
change is consistent with the Act. [Release No. 34–80474; File No. SR–Phlx–
2017–30] A. Self-Regulatory Organization’s
Comments may be submitted by any of
Statement of the Purpose of, and
the following methods: Self-Regulatory Organizations; Statutory Basis for, the Proposed Rule
Electronic Comments NASDAQ PHLX LLC; Notice of Filing Change
• Use the Commission’s Internet and Immediate Effectiveness of
Proposed Rule Change To Amend the 1. Purpose
comment form (http://www.sec.gov/
Pricing Schedule The purpose of the proposed rule
rules/sro.shtml); or
• Send an email to rule-comments@ change is to amend the Exchange’s
April 17, 2017. Pricing Schedule at Section B, entitled
sec.gov. Please include File Number SR– Pursuant to Section 19(b)(1) of the
PEARL–2017–18 on the subject line. ‘‘Customer Rebate Program,’’ Section II,
Securities Exchange Act of 1934 entitled ‘‘Multiply Listed Options Fees,’’
Paper Comments (‘‘Act’’),1 and Rule 19b–4 thereunder,2 and Section IV, Part B entitled ‘‘FLEX
• Send paper comments in triplicate notice is hereby given that on April 7, Transaction Fees’’ to remove references
to Secretary, Securities and Exchange 2017, NASDAQ PHLX LLC (‘‘Phlx’’ or to MNX.
Commission, 100 F Street NE., ‘‘Exchange’’) filed with the Securities The Exchange is delisting MNX on
Washington, DC 20549–1090. and Exchange Commission (‘‘SEC’’ or Phlx on April 7, 2017. As a result of
‘‘Commission’’) the proposed rule delisting MNX, the Exchange is
All submissions should refer to File
change as described in Items I, II, and removing references from its Pricing
Number SR–PEARL–2017–18. This file
III, below, which Items have been Schedule to specific pricing for MNX.
number should be included on the
prepared by the Exchange. The No market participant would be able to
subject line if email is used. To help the
Commission is publishing this notice to trade an option overlying MNX on Phlx
Commission process and review your
solicit comments on the proposed rule once it is delisted.
comments more efficiently, please use
change from interested persons.
only one method. The Commission will 2. Statutory Basis
post all comments on the Commission’s I. Self-Regulatory Organization’s The Exchange believes that its
Internet Web site (http://www.sec.gov/ Statement of the Terms of Substance of proposal is consistent with Section 6(b)
rules/sro.shtml). Copies of the the Proposed Rule Change of the Act,6 in general, and furthers the
submission, all subsequent The Exchange proposes to proposal objectives of Sections 6(b)(4) and 6(b)(5)
amendments, all written statements [sic] to amend the Exchange’s Pricing of the Act,7 in particular, in that it
with respect to the proposed rule Schedule at Section B, entitled provides for the equitable allocation of
change that are filed with the ‘‘Customer Rebate Program,’’ Section II, reasonable dues, fees and other charges
Commission, and all written entitled ‘‘Multiply Listed Options among members and issuers and other
communications relating to the Fees,’’ 3 and Section IV, Part B entitled persons using any facility, and is not
proposed rule change between the ‘‘FLEX Transaction Fees’’ 4 to remove designed to permit unfair
Commission and any person, other than references to MNX.5 discrimination between customers,
those that may be withheld from the The text of the proposed rule change issuers, brokers, or dealers.
public in accordance with the is available on the Exchange’s Web site The Commission and the courts have
provisions of 5 U.S.C. 552, will be at http://nasdaqphlx.cchwallstreet. repeatedly expressed their preference
available for Web site viewing and com/, at the principal office of the for competition over regulatory
printing in the Commission’s Public intervention in determining prices,
Reference Room, 100 F Street NE., 19 17 products, and services in the securities
CFR 200.30–3(a)(12).
Washington, DC 20549, on official 1 15 U.S.C. 78s(b)(1). markets. In Regulation NMS, while
business days between the hours of
sradovich on DSK3GMQ082PROD with NOTICES

2 17 CFR 240.19b–4. adopting a series of steps to improve the
10:00 a.m. and 3:00 p.m. Copies of the 3 These fees include options overlying equities, current market model, the Commission
filing also will be available for ETFs, ETNs and indexes which are Multiply Listed. highlighted the importance of market
inspection and copying at the principal 4 Multiply Listed Options includes options
forces in determining prices and SRO
office of the Exchange. All comments overlying equities, ETFs, ETNs and indexes which
are Multiply Listed. revenues and, also, recognized that
received will be posted without change; 5 MNX represents options on one-tenth the value
the Commission does not edit personal of the Nasdaq 100 Index traded under the symbol 6 15 U.S.C. 78f(b).
identifying information from MNX (‘‘MNX’’). 7 15 U.S.C. 78f(b)(4) and (5).

VerDate Sep<11>2014 17:30 Apr 20, 2017 Jkt 241001 PO 00000 Frm 00068 Fmt 4703 Sfmt 4703 E:\FR\FM\21APN1.SGM 21APN1
Document Created: 2017-04-21 01:19:06
Document Modified: 2017-04-21 01:19:06
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		82 FR 18795