[Federal Register Volume 82, Number 157 (Wednesday, August 16, 2017)]
[Notices]
[Pages 38962-38964]
[FR Doc No: 2017-17278]

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-81370; File No. SR-Phlx-2017-64]

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

August 10, 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 July 31, 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.
---------------------------------------------------------------------------

    \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 at
Section I, entitled ``Rebates and Fees for Adding and Removing
Liquidity in SPY,'' and Section IV, Part A entitled ``PIXL Pricing'' to
amend pricing related to PIXL \3\ executions.
---------------------------------------------------------------------------

    \3\ PIXL\TM\ is the Exchange's price improvement mechanism known
as Price Improvement XL or PIXL. A member or member organization may
electronically submit for execution an order it represents as agent
on behalf of a public customer, broker-dealer, or any other entity
(``PIXL Order'') against principal interest or against any other
order (except as provided in Rule 1080(n)(i)(E)) it represents as
agent (``Initiating Order''), provided it submits the PIXL order for
electronic execution into the PIXL Auction pursuant to Rule 1080.
See Exchange Rule 1080(n).
---------------------------------------------------------------------------

    While these amendments are effective upon filing, the Exchange has
designated the proposed amendments to be operative on August 1, 2017.
    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 I, entitled ``Rebates and Fees for Adding
and Removing Liquidity in SPY'' and specifically, the section that
pertains to PIXL Executions in Standard and Poor's Depositary Receipts/
SPDRs (``SPY'').\4\ The Exchange also proposes to amend PIXL Pricing in
Section IV, Part A, entitled ``PIXL Pricing'' for all other Multiply-
Listed options symbols.
---------------------------------------------------------------------------

    \4\ Options overlying Standard and Poor's Depositary Receipts/
SPDRs (``SPY'') are based on the SPDR exchange-traded fund
(``ETF''), which is designed to track the performance of the S&P 500
Index.
---------------------------------------------------------------------------

    First, the Exchange proposes to increase the SPY Complex PIXL
rebate it offers Phlx members or member organizations that qualify for
Section B, Customer Rebate Tiers \5\ 2 through 6 or qualify for the
Monthly Firm Fee Cap. Presently, the Exchange offers a rebate of $0.10
per contract for all SPY Complex PIXL Orders greater than 499
contracts, provided the member or member organization executes an
average of 2,500 contracts per day of SPY Complex PIXL Orders in a
month. The Exchange proposes to increase that rebate to $0.12 per
contract. In doing so, the Exchange desires to incentivize members or
member organizations to transact a greater number of SPY Complex PIXL
Orders while also incentivizing members or member organizations to
submit Customer order flow on Phlx.
---------------------------------------------------------------------------

    \5\ Section B of the Pricing Schedule contains Customer Rebate
Tiers which are calculated by totaling Customer volume in Multiply
Listed Options (including SPY) that are electronically-delivered and
executed, except volume associated with electronic QCC Orders, as
defined in Exchange Rule 1080(o). Rebates are paid on Customer
Rebate Tiers according to certain categories. Members and member
organizations under Common Ownership may aggregate their Customer
volume for purposes of calculating the Customer Rebate Tiers and
receiving rebates. Affiliated Entities may aggregate their Customer
volume for purposes of calculating the Customer Rebate Tiers and
receiving rebates. See Section B of the Pricing Schedule.
---------------------------------------------------------------------------

    Second, the Exchange proposes to increase the Complex PIXL
(excluding SPY Options rebate it offers to Phlx members and member
organizations that qualify for Section B, Customer Rebate Tiers 2
through 6 or qualify for the Monthly Firm Fee Cap. Presently, the
Exchange offers a rebate of $0.10 per contract for all Complex PIXL
Orders (excluding SPY Options) greater than 499 contracts, provided the
member or member organization executes an average of 2,500 contracts
per day of Complex SPY PIXL Orders in a month. The Exchange proposes to
increase that rebate to $0.12 per contract. In doing so, the Exchange
desires to incentivize members and member organizations to transact a
greater number of Complex PIXL Orders while also incentivizing members
and member organizations to submit Customer order flow on Phlx to
obtain the $0.12 rebate on all Complex PIXL Orders (excluding SPY
Options).
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.
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78f(b).
    \7\ 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, 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 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\
---------------------------------------------------------------------------

    \8\ Securities Exchange Act Release No. 51808 (June 9, 2005), 70
FR 37496, 37499 (June 29, 2005) (``Regulation NMS Adopting
Release'').
---------------------------------------------------------------------------

    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\
---------------------------------------------------------------------------

    \9\ NetCoalition v. SEC, 615 F.3d 525 (D.C. Cir. 2010).
    \10\ See NetCoalition, at 534-535.
    \11\ 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'. . . .'' \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.
---------------------------------------------------------------------------

    \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)).
---------------------------------------------------------------------------

    The Exchange believes that its proposal is reasonable to offer to
Phlx members or member organizations that qualify for Section B,
Customer Rebate Tiers 2 through 6 or qualify for the Monthly Firm Fee
Cap an increased rebate of $0.12 per contract for all SPY Complex PIXL
Orders greater than 499 contracts, provided the member or member
organization executes an average of 2,500 contracts per day of SPY
Complex PIXL Orders in a month. The proposed rebate increase will
incentivize members and member organizations to transact a greater
number of SPY Complex PIXL Orders will also incentivize members and
member organizations to submit Customer order flow on Phlx. All members
and member organizations are eligible for this increased rebate.
    The Exchange also believes that its proposal is equitable and not
unfairly discriminatory because all members and member organizations
are eligible for the proposed rebate increase, provided they met the
requisite qualifications. Members and member organizations would be
uniformly paid the increased rebate.
    The Exchange also believes that its proposal is reasonable to offer
to Phlx members or member organizations that qualify for Section B,
Customer Rebate Tiers 2 through 6 or qualify for the Monthly Firm Fee
Cap an increased rebate of $0.12 per contract for all Complex PIXL
Orders (excluding SPY Options) greater than 499 contracts, provided the
member or member organization executes an average of 2,500 contracts
per day of SPY Complex PIXL Orders in a month. The proposed increased
rebate will incentivize members and member organizations to transact a
greater number of Complex PIXL Orders and will also incentivize members
and member organizations to submit Customer order flow on Phlx. All
members and member organizations are eligible for this rebate, which
applies to all Complex PIXL Orders excluding SPY Options.
    This proposal is equitable and not unfairly discriminatory because
all members and member organizations are eligible for the proposed
increased rebate, provided that they meet the requisite qualifications.

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.
    The Exchange believes that increasing its rebates will promote
inter-market competition by differentiating it from other options
exchanges (e.g., MIAX) and making it a more attractive options trading
venue.
    The Exchange also believes that its proposal does not impose an
undue burden on intra-market competition to offer Phlx members and
member organizations that qualify for Section B, Customer Rebate Tiers
2 through 6 or qualify for the Monthly Firm Fee Cap an increased rebate
of $0.12 per contract for all SPY Complex PIXL Orders greater than 499
contracts, provided the member or member organization executes an
average of 2,500 contracts per day of SPY Complex PIXL Orders in a
month. All members and member organizations are eligible for the
proposed rebate increase, provided they met the requisite
qualifications. Members and member organizations would be uniformly
paid the increased rebate.
    For the same reasons, the Exchange does not believe that its
proposal imposes an undue burden on intra-market competition to offer
to Phlx members and member organizations that qualify for Section B,
Customer Rebate Tiers 2 through 6 or qualify for the Monthly Firm Fee
Cap an increased rebate of $0.12 per contract for all Complex PIXL
Orders (excluding SPY Options) greater than 499 contracts, provided the
member or member organization executes an average of 2,500 contracts
per day of SPY Complex PIXL Orders in a month.

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\
---------------------------------------------------------------------------

    \13\ 15 U.S.C. 78s(b)(3)(A)(ii).
---------------------------------------------------------------------------

    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_ADDRESS>Please include
File Number SR-Phlx-2017-64 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-2017-64. 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-2017-64 and should be
submitted on or before September 6, 2017.
---------------------------------------------------------------------------

    \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. 2017-17278 Filed 8-15-17; 8:45 am]
 BILLING CODE 8011-01-P


MEMORANDUM
Date: May 22, 2013
To: Docket #EPA - HQ - OAR - 2012 - 0580
RE: Call with Excellence Industries

On May 22, 2013, EPA staff participated in a conference call with Excellence Industries. EPA participants were Cindy Newberg, Tom Land, Dave Godwin, Sally Hamlin, and Melissa Fiffer.
This conference call was about the Notice of Proposed Rulemaking Protection of Stratospheric Ozone: Revision of the Venting Prohibition for Specific Refrigerant Substitutes (78 FR 21871). Dell Dahl, President of Excellence Industries, asked about whether the proposal considered venting hydrocarbons indoors, use of explosion-proof recovery equipment in other countries, and the status of equipment standards from standard-setting bodies such as UL and AHRI.

EPA staff described the proposed rule and process for submitting comments.