[Federal Register Volume 88, Number 244 (Thursday, December 21, 2023)]
[Proposed Rules]
[Pages 88279-88281]
[FR Doc No: 2023-27869]

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 71

[Docket No. FAA-2023-2431; Airspace Docket No. 23-AEA-26]
RIN 2120-AA66

Amendment of Class E Airspace; Ebensburg, PA

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Notice of proposed rulemaking (NPRM).

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SUMMARY: This action proposes to amend the Class E airspace at
Ebensburg, PA. The FAA is proposing this action as the result of an
airspace review conducted due to the decommissioning of the Revloc very
high frequency omnidirectional range (VOR) as part of the VOR Minimum
Operating Network (MON) Program. This action will bring the airspace
into compliance with FAA orders to support instrument flight rule (IFR)
operations.

DATES: Comments must be received on or before February 5, 2024.

ADDRESSES: Send comments identified by FAA Docket No. FAA-2023-2431 and
Airspace Docket No. 23-AEA-26 using any of the following methods:
    * Federal eRulemaking Portal: Go to www.regulations.gov and follow
the online instruction for sending your comments electronically.
    * Mail: Send comments to Docket Operations, M-30; U.S. Department
of Transportation, 1200 New Jersey Avenue SE, Room W12-140, West
Building Ground Floor, Washington, DC 20590-0001.
    * Hand Delivery or Courier: Take comments to Docket Operations in
Room W12-140 of the West Building Ground Floor at 1200 New Jersey
Avenue SE, Washington, DC, between 9 a.m. and 5 p.m., Monday through
Friday, except Federal holidays.
    * Fax: Fax comments to Docket Operations at<PHONE_NUMBER>.
    Docket: Background documents or comments received may be read at
www.regulations.gov at any time. Follow the online instructions for
accessing the docket or go to Docket Operations in Room W12-140 of the
West Building Ground Floor at 1200 New Jersey Avenue SE, Washington,
DC, between 9 a.m. and 5 p.m., Monday through Friday, except Federal
holidays.
    FAA Order JO 7400.11H, Airspace Designations and Reporting Points,
and subsequent amendments can be viewed online at www.faa.gov/
air_traffic/

publications/. You may also contact the Rules and Regulations Group,
Office of Policy, Federal Aviation Administration, 800 Independence
Avenue SW, Washington, DC 20591; telephone:<PHONE_NUMBER>.

FOR FURTHER INFORMATION CONTACT: Jeffrey Claypool, Federal Aviation
Administration, Operations Support Group, Central Service Center, 10101
Hillwood Parkway, Fort Worth, TX 76177; telephone<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:

Authority for This Rulemaking

    The FAA's authority to issue rules regarding aviation safety is
found in Title 49 of the United States Code. Subtitle I, Section 106
describes the authority of the FAA Administrator. Subtitle VII,
Aviation Programs, describes in more detail the scope of the agency's
authority. This rulemaking is promulgated under the authority described
in Subtitle VII, Part A, Subpart I, Section 40103. Under that section,
the FAA is charged with prescribing regulations to assign the use of
airspace necessary to ensure the safety of aircraft and the efficient
use of airspace. This regulation is within the scope of that authority
as it would amend the Class E airspace extending upward from 700 feet
above the surface at Ebensburg Airport, Ebensburg, PA, to support IFR
operations at this airport.

Comments Invited

    The FAA invites interested persons to participate in this
rulemaking by submitting written comments, data, or views. Comments are
specifically invited on the overall regulatory, aeronautical, economic,
environmental, and energy-related aspects of the proposal. The most
helpful comments reference a specific portion of the proposal, explain
the reason for any recommended change, and include supporting data. To
ensure the docket does not contain duplicate comments, commenters
should submit only one time if comments are filed electronically, or
commenters should send only one copy of written comments if comments
are filed in writing.
    The FAA will file in the docket all comments it receives, as well
as a report summarizing each substantive public contact with FAA
personnel concerning this proposed rulemaking. Before acting on this
proposal, the FAA will consider all comments it received on or before
the closing date for comments. The FAA will consider comments filed
after the comment period has closed if it is possible to do so without
incurring expense or dely. The FAA may change this proposal in light of
the comments it receives.
    Privacy: In accordance with 5 U.S.C. 553(c), DOT solicits comments
from the public to better inform its rulemaking process. DOT post these
comments, without edit, including any personal information the
commenter provides, to www.regulations.gov as described in the system
of records notice (DOT/ALL-14FDMS), which can be reviewed at
www.dot.gov/privacy.

Availability of Rulemaking Documents

    An electronic copy of this document may be downloaded through the
internet at www.regulations.gov. Recently published rulemaking
documents can also be accessed through the FAA's web page at
www.faa.gov/air_traffic/publications/airspace_amendments/.
    You may review the public docket containing the proposal, any
comments received, and any final disposition in person in the Dockets
Office (see the ADDRESSES section for the address, phone number, and
hours of operations). An informal docket may also be examined during
normal business hours at the Federal Aviation Administration, Air
Traffic Organization, Central Service Center, Operations Support Group,
10101 Hillwood Parkway, Fort Worth, TX 76177.

Incorporation by Reference

    Class E airspace is published in paragraph 6005 of FAA Order JO
7400.11, Airspace Designations and Reporting Points, which is
incorporated by reference in 14 CFR 71.1 on an annual basis. This
document proposes to amend the current version of that order, FAA Order
JO 7400.11H, dated August 11, 2023, and effective September 15, 2023.
These updates would be published subsequently in the next update to FAA
Order JO 7400.11. That order is publicly available as listed in the
ADDRESSES section of this document.
    FAA Order JO 7400.11H lists Class A, B, C, D, and E airspace areas,
air traffic service routes, and reporting points.

The Proposal

    The FAA is proposing to amend 14 CFR part 71 by amending the Class
E airspace extending upward from 700 feet above the surface to within
an 8.1-mile (increased from a 6.4-mile) radius of Ebensburg Airport,
Ebensburg, PA; adding an extension within 4 miles each side of the
237[deg] bearing from the airport extending from the 8.1-mile radius to
11.3 miles west of the airport; removing the exclusion area as it is no
longer required; and updating the geographic coordinates of the airport
to coincide with the FAA's aeronautical database.
    This FAA is proposing this action as the result of an airspace
review conducted due to the decommissioning of the Revloc VOR as part
of the VOR MON Program, to bring the airspace into compliance with
current FAA orders, and to support IFR operations at this airport.

Regulatory Notices and Analyses

    The FAA has determined that this proposed regulation only involves
an established body of technical regulations for which frequent and
routine amendments are necessary to keep them operationally current.
It, therefore: (1) is not a ``significant regulatory action'' under
Executive Order 12866; (2) is not a ``significant rule'' under DOT
Regulatory Policies and Procedures (44 FR 11034; February 26, 1979);
and (3) does not warrant preparation of a regulatory evaluation as the
anticipated impact is so minimal. Since this is a routine matter that
will only affect air traffic procedures and air navigation, it is
certified that this proposed rule, when promulgated, will not have a
significant economic impact on a substantial number of small entities
under the criteria of the Regulatory Flexibility Act.

Environmental Review

    This proposal will be subject to an environmental analysis in
accordance with FAA Order 1050.1F, ``Environmental Impacts: Policies
and Procedures'' prior to any FAA final regulatory action.

List of Subjects in 14 CFR Part 71

    Airspace, Incorporation by reference, Navigation (air).

The Proposed Amendment

    In consideration of the foregoing, the Federal Aviation
Administration proposes to amend 14 CFR part 71 as follows:

PART 71--DESIGNATION OF CLASS A, B, C, D, AND E AIRSPACE AREAS; AIR
TRAFFIC SERVICE ROUTES; AND REPORTING POINTS

0
1. The authority citation for 14 CFR part 71 continues to read as
follows:

    Authority: 49 U.S.C. 106(f), 106(g); 40103, 40113, 40120; E.O.
10854, 24 FR 9565, 3 CFR, 1959-1963 Comp., p. 389.

Sec.  71.1  [Amended]

0
2. The incorporation by reference in 14 CFR 71.1 of FAA Order JO
7400.11H, Airspace Designations and Reporting

Points, dated August 11, 2023, and effective September 15, 2023, is
amended as follows:

Paragraph 6005 Class E Airspace Areas Extending Upward From 700
Feet or More Above the Surface of the Earth.

* * * * *

AEA PA E5 Ebensburg, PA [Amended]

Ebensburg Airport, PA
    (Lat. 40[deg]27'41'' N, long. 78[deg]46'31'' W)

    That airspace extending upward from 700 feet above the surface
within a 8.1-mile radius of Ebensburg Airport; and within 4 miles
each side of the 237[deg] bearing from the airport extending from
the 8.1-mile radius to 11.3 miles west of the airport.
* * * * *

    Issued in Fort Worth, Texas, on December 14, 2023.
Martin A. Skinner,
Acting Manager, Operations Support Group, ATO Central Service Center.
[FR Doc. 2023-27869 Filed 12-20-23; 8:45 am]
BILLING CODE 4910-13-P


[Federal Register Volume 81, Number 95 (Tuesday, May 17, 2016)]
[Notices]
[Pages 30573-30575]
[FR Doc No: 2016-11541]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-77811; File No. SR-Phlx-2016-57]

Self-Regulatory Organizations; NASDAQ PHLX LLC; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change Related to Customer
Rebates

May 11, 2016.
    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 May 2, 2016, NASDAQ PHLX LLC (``Phlx'' or ``Exchange'') filed
with the Securities and Exchange Commission (``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 amend the Exchange's Pricing Schedule at
Section B, entitled ``Customer Rebate Program.''
    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 the Exchange's
Pricing Schedule at Section B, entitled ``Customer Rebate Program.''
Specifically, the Exchange is proposing to exclude options overlying
NDX \3\ and MNX \4\ from receiving a Customer \5\ rebate.
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    \3\ NDX represents options on the Nasdaq 100 Index traded under
the symbol NDX (``NDX'').
    \4\ MNX represents options on the one-tenth value of the Nasdaq
100 Index traded under the symbol MNX (``MNX'').
    \5\ The term ``Customer'' applies to any transaction that is
identified by a member or member organization for clearing in the
Customer range at The Options Clearing Corporation which is not for
the account of a broker or dealer or for the account of a
``Professional'' (as that term is defined in Rule 1000(b)(14)).
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    Currently, the Exchange has a Customer Rebate Program consisting of
five tiers that pay Customer rebates on three Categories, A,\6\ B \7\
and C \8\ of transactions.\9\ A Phlx member qualifies for a certain
rebate tier based on the percentage of total national customer volume
in multiply-listed options that it transacts monthly on Phlx. The
Exchange calculates Customer volume in Multiply Listed Options by
totaling electronically-delivered and executed volume, excluding volume
associated with electronic Qualified Contingent Cross (``QCC'')
Orders,\10\ as defined in Exchange Rule 1080(o).\11\ The Exchange pays
the following rebates: \12\
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    \6\ Category A rebates are paid to members executing
electronically-delivered Customer Simple Orders in Penny Pilot
Options and Customer Simple Orders in Non-Penny Pilot Options in
Section II symbols.
    \7\ Category B rebates are paid on Customer PIXL Orders in
Section II symbols that execute against non-Initiating Order
interest. In the instance where member organizations qualify for
Tier 4 or higher in the Customer Rebate Program, Customer PIXL
Orders that execute against a PIXL Initiating Order are paid a
rebate of $0.14 per contract. Rebates on Customer PIXL Orders are
capped at 4,000 contracts per order for Simple PIXL Orders.
    \8\ Category C rebates are paid to members executing
electronically-delivered Customer Complex Orders in Penny Pilot
Options and Non-Penny Pilot Options in Section II symbols. Rebates
are paid on Customer PIXL Complex Orders in Section II symbols that
execute against non-Initiating Order interest. Customer Complex PIXL
Orders that execute against a Complex PIXL Initiating Order are not
paid a rebate under any circumstances. The Category C Rebate is paid
[sic] when an electronically-delivered Customer Complex Order,
including Customer Complex PIXL Order, executes against another
electronically-delivered Customer Complex Order. Rebates on Customer
PIXL Orders are capped at 4,000 contracts per order leg for Complex
PIXL Orders.
    \9\ See Section B of the Pricing Schedule.
    \10\ A QCC Order is comprised of an originating order to buy or
sell at least 1,000 contracts, or 10,000 contracts in the case of
Mini Options, that is identified as being part of a qualified
contingent trade, as that term is defined in Rule 1080(o)(3),
coupled with a contra-side order or orders totaling an equal number
of contracts. See Rule 1080(o).
    \11\ Members and member organizations under common ownership may
aggregate their Customer volume for purposes of calculating the
Customer Rebate Tiers and receiving rebates. Common ownership means
members or member organizations under 75% common ownership or
control. See the Preface of the Pricing Schedule.
    \12\ SPY is included in the calculation of Customer volume in
Multiply Listed Options that are electronically-delivered and
executed for purposes of the Customer Rebate Program, however, the
rebates do not apply to electronic executions in SPY. Additionally,
the Exchange pays a $0.02 per contract Category A and B rebate and a
$0.03 per contract Category C rebate in addition to the applicable
Tier 2 and 3 rebate to a Specialist or Market Maker or its member or
member organization affiliate under Common Ownership provided the
Specialist or Market Maker has reached the Monthly Market Maker Cap,
as defined in Section II. See Section B of the Pricing Schedule.

----------------------------------------------------------------------------------------------------------------
                                       Percentage thresholds of
                                     national customer volume in
                                      multiply-listed equity and
       Customer rebate tiers             ETF options classes,       Category A      Category B      Category C
                                        excluding spy options
                                              (monthly)
----------------------------------------------------------------------------------------------------------------
Tier 1.............................  0.00%-0.60%................           $0.00           $0.00           $0.00
Tier 2.............................  Above 0.60%-1.10%..........            0.10            0.10            0.17
Tier 3.............................  Above 1.10%-1.60%..........            0.15            0.12            0.17
Tier 4.............................  Above 1.60%-2.50%..........            0.20            0.16            0.22
Tier 5.............................  Above 2.50%................            0.21            0.17            0.22
----------------------------------------------------------------------------------------------------------------

    Today, options overlying NDX and MNX are included in the total
volume to qualify a market participant for a Customer Rebate. The
Exchange is proposing to continue to permit the electronically-
delivered and executed volume associated with options overlying NDX and
MNX to be included in the calculation of total market volume. The
Exchange proposes to exclude options overlying NDX and MNX as eligible
to receive a Customer Rebate in any Category.
    In calculating electronically-delivered and executed Customer
volume in Multiply Listed Options, the numerator of the equation will
remain unchanged and will continue to include all electronically-
delivered and executed Customer volume in Multiply Listed Options,
including NDX and MNX. The denominator of that equation will also
remain unchanged and will continue to include national customer volume
in multiply-listed equity and ETF options volume. By including options
overlying NDX and MNX in the computation for Customer Rebates, members
will continue to receive the benefit of those transactions toward
calculating their eligible rebate tiers and earning a rebate on all
qualifying transactions.
    At this time, the Exchange proposes to not pay Customer Rebates on
options overlying NDX and MNX because of the exclusivity of these
options. NDX and MNX are Phlx proprietary index options which currently
trade on Phlx and one other options exchange. Therefore, the Exchange
would not pay rebates on options overlying NDX and MNX as part of the
Customer Rebate Program. The Exchange believes members will continue to
be afforded an opportunity to achieve new Customer Rebate Program tiers
or maintain their current level of Customer Rebate Program tiers.
2. Statutory Basis
    The proposal is consistent with Section 6(b) of the Act,\13\ in
general, and furthers the objectives of Sections 6(b)(4) and 6(b)(5) of
the Act,\14\ 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 the
Exchange operates or controls, and is not designed to permit unfair
discrimination between customers, issuers, brokers, or dealers.
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    \13\ 15 U.S.C. 78f(b).
    \14\ 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 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.'' \15\
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    \15\ See Securities Exchange Act Release No. 51808 (June 9,
2005), 70 FR 37497 [sic], 37499 (June 29, 2005) (``Regulation NMS
Adopting Release'').
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    Likewise, in NetCoalition v. Securities and Exchange Commission
\16\ 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.\17\ 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.'' \18\
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    \16\ See Securities Exchange Act Release No. 51808 (June 9,
2005) [sic] at 534-535.
    \17\ See Securities Exchange Act Release No. 51808 (June 9,
2005) [sic] at 534.
    \18\ See Securities Exchange Act Release No. 51808 (June 9,
2005) [sic] 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' . . . .'' \19\ 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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    \19\ See Securities Exchange Act Release No. 51808 (June 9,
2005) [sic] at 539 (quoting Securities Exchange Act Release No.
59039 (December 2, 2008), 73 FR 74770, 74782-83 (December 9, 2008)
(SR-NYSEArca-2006-21) [sic].
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    It is reasonable to no longer pay Customer Rebates on options
overlying NDX and MNX in any Category (A, B or C) because these
proprietary index options only trade on two options markets at this
time. The original intent of the Customer Rebate Program was to pay
rebates on electronically-delivered Multiply-Listed Options. By
definition, these indices qualify as Multiply-Listed Options because
they trade on more than one options exchange. These proprietary index
options trade on Phlx and one other options exchange. The Exchange does
not desire to pay rebates on options overlying NDX and MNX because of
their exclusivity. Despite the fact that technically these options
trade on more than one venue, other exchanges cannot list these
options. The Exchange believes it is reasonable to continue to count
options overlying NDX and MNX in the total volume to qualify a market
participant for a Customer Rebate, however, options overlying NDX and
MNX will no longer be paid the Customer rebates in any Category because
of the exclusivity of this option. Market participants would continue
to benefit from NDX and MNX options volume in terms of qualifying for
Customer Rebate Tiers. The Exchange believes that not paying Customer
Rebates on options overlying NDX and MNX further aligns these products
with other Singly Listed Options as compared to Multiply-Listed
Options.
    It is equitable and not unfairly discriminatory to no longer pay
Customer Rebates on options overlying NDX and MNX in any Category
because the Exchange would apply its calculation to determine the
eligibility and payment of Customer rebates in a uniform manner. The
Exchange's proposal to no longer pay Customer Rebates on options
overlying NDX and MNX in any Category is equitable and not unfairly
discriminatory because the Exchange would no longer pay Customer
Rebates on any transaction with options overlying either NDX or MNX to
any market participant. Also, any market participant is eligible to
earn a Customer Rebate.

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, that the degree to which fee changes in this
market may impose any burden on competition is extremely limited.
    The Exchange's proposal to no longer pay Customer Rebates on
options overlying NDX and MNX in any Category does not impose an undue
burden on intra-market competition because the Exchange would apply the
calculation of Customer rebates and would pay rebates on qualifying
orders in a uniform manner. No market participant would be paid a
Customer Rebate in options overlying NDX or MNX. All market
participants may participate in the Customer Rebate Program. Members
would continue to benefit from the inclusion of options overlying NDX
and MNX in the total volume to qualify a market participant for a
Customer Rebate.
    Also, the Exchange's proposal to no longer pay Customer Rebates on
options overlying NDX and MNX in any Category does not impose an undue
burden on inter-market competition because there is only one other
exchange that transacts options overlying NDX and MNX through a
contractual agreement with the Exchange. That venue may choose to also
not pay rebates on options overlying NDX or MNX. Other venues may not
list these proprietary indices.

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.\20\
---------------------------------------------------------------------------

    \20\ 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-2016-57 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-2016-57. 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-2016-57 and should be
submitted on or before June 7, 2016.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\21\
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    \21\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-11541 Filed 5-16-16; 8:45 am]
 BILLING CODE 8011-01-P


[Federal Register Volume 80, Number 224 (Friday, November 20, 2015)]
[Notices]
[Pages 72768-72773]
[FR Doc No: 2015-29602]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-76446; File No. SR-Phlx-2015-89]

Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change to a Market
Access and Routing Subsidy or ``MARS''

November 16, 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 2, 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 the
Substance of the Proposed Rule Change

    The Exchange proposes to amend the Exchange's Pricing Schedule at
Section IV, entitled ``Other Transaction Fees'' to create a subsidy
program, the Market Access and Routing Subsidy or ``MARS,'' for Phlx
members that provide certain order routing functionalities \3\ to other
Phlx members and/or use such functionalities themselves.
---------------------------------------------------------------------------

    \3\ The order routing functionalities permit a Phlx member to
provide access and connectivity to other members as well utilize
such access for themselves. The Exchange notes that under this
arrangement it will be possible for one Phlx member to be eligible
for payments under MARS, while another Phlx member might potentially
be liable for transaction charges associated with the execution of
the order, because those orders were delivered to the Exchange
through a Phlx member's connection to the Exchange and that member
qualified for the MARS Payment. Consider the following example: both
members A and B are Phlx members but A does not utilize its own
connections to route orders to the Exchange, and instead utilizes
B's connections. Under this program, B will be eligible for the MARS
Payment while A is liable for any transaction charges resulting from
the execution of orders that originate from A, arrive at the
Exchange via B's connectivity, and subsequently execute and clear at
The Options Clearing Corporation or ``OCC,'' where A is the valid
executing clearing member or give-up on the transaction. Similarly,
where B utilizes its own connections to execute transactions, B will
be eligible for the MARS Payment, but would also be liable for any
transaction resulting from the execution of orders that originate
from B, arrive at the Exchange via B's connectivity, and
subsequently execute and clear at OCC, where B is the valid
executing clearing member or give-up on the transaction.
---------------------------------------------------------------------------

    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
    Phlx proposes a new subsidy program, MARS, which would pay a
subsidy to Phlx members that provide certain order routing
functionalities to other Phlx members and/or use such functionalities
themselves. Generally, under MARS, Phlx proposes to make payments to
participating Phlx members to subsidize their costs of providing
routing services to route orders to Phlx. The Exchange believes that
MARS will attract higher volumes of electronic equity and ETF options
volume to the Exchange from non-Phlx market participants as well as
Phlx members.
MARS System Eligibility
    To qualify for MARS, a Phlx member's order routing functionality
would be required to meet certain criteria. Specifically the member's
routing system (hereinafter ``System'') would be required to: (1)
Enable the electronic routing of orders to all of the U.S. options
exchanges, including Phlx; (2) provide current consolidated market data
from the U.S. options exchanges; and (3) be capable of interfacing with
Phlx's API to access current Phlx match engine functionality. The
member's System would also need to cause Phlx to be one of the top
three default destination exchanges for individually executed
marketable orders if Phlx is at the national best bid or offer
(``NBBO''), regardless of size or time, but allow any user to manually
override Phlx as the default destination on an order-by-order basis.
Specifically, with respect to Complex Orders,\4\ the Exchange would not
require Complex Orders to enable the electronic routing of orders to
all of the U.S. options exchanges or provide current consolidated
market data from the U.S. options exchanges. The Exchange notes that
these requirements would not make sense for Complex Orders as some
options exchanges do not offer Complex Order execution systems.
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    \4\ A Complex Order is any order involving the simultaneous
purchase and/or sale of two or more different options series in the
same underlying security, priced at a net debit or credit based on
the relative prices of the individual components, for the same
account, for the purpose of executing a particular investment
strategy. Furthermore, a Complex Order can also be a stock-option
order, which is an order to buy or sell a stated number of units of
an underlying stock or exchange-traded fund (``ETF'') coupled with
the purchase or sale of options contract(s). See Exchange Rule 1080,
Commentary .08(a)(i).
---------------------------------------------------------------------------

    The Exchange would require Phlx members desiring to participate in
MARS \5\ to complete a form, in a manner prescribed by the Exchange,
and reaffirm their information on a quarterly basis to the Exchange.
Any Phlx member would be permitted to apply for MARS, provided the
above-referenced requirements are met, including a robust and reliable
System. The member would be solely responsible for implementing and
operating its System.
---------------------------------------------------------------------------

    \5\ For example, a Phlx member that desires to qualify for MARS
in November must complete the form and submit it to the Exchange no
later than the last business day of November. Such form will require
the Phlx member to identify the Phlx member seeking the MARS Payment
and must list, among other things, the connections utilized by the
Phlx member to provide Exchange access to other Phlx members and/or
itself. MARS Payments would be made one month in arrears (i.e., a
MARS Payment earned for activity in November would be paid to the
qualifying Phlx member in December), as is the case with all other
transactional payments and assessments made by the Exchange.
---------------------------------------------------------------------------

MARS Eligible Contracts
    A MARS Payment would be made to Phlx members that have System
Eligibility and have routed at least 30,000 Eligible Contracts daily in
a month, which were executed on Phlx. For the purpose of qualifying for
the MARS Payment, Eligible Contracts may include Firm,\6\ Broker-
Dealer,\7\ Joint

Back Office or ``JBO'' \8\ or Professional \9\ equity option orders
that are electronically delivered and executed. Eligible Contracts do
not include floor-based orders, qualified contingent cross or ``QCC''
orders,\10\ price improvement or ``PIXL'' orders,\11\ Mini-Option
orders \12\ or Singly-Listed Options \13\ orders.
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    \6\ The term ``Firm'' or (``F'') applies to any transaction that
is identified by a Participant for clearing in the Firm range at
OCC.
    \7\ The term ``Broker-Dealer'' applies to any transaction which
is not subject to any of the other transaction fees applicable
within a particular category.
    \8\ The term ``Joint Back Office'' or ``JBO'' applies to any
transaction that is identified by a member or member organization
for clearing in the Firm range at OCC and is identified with an
origin code as a JBO. A JBO will be priced the same as a Broker-
Dealer. A JBO participant is a member, member organization or non-
member organization that maintains a JBO arrangement with a clearing
broker-dealer (``JBO Broker'') subject to the requirements of
Regulation T Section 220.7 of the Federal Reserve System as further
discussed at Exchange Rule 703.
    \9\ The term ``professional'' means any person or entity that
(i) is not a broker or dealer in securities, and (ii) places more
than 390 orders in listed options per day on average during a
calendar month for its own beneficial account(s). See Rule
1000(b)(14).
    \10\ A QCC Order is comprised of an order to buy or sell at
least 1000 contracts that is identified as being part of a qualified
contingent trade, as that term is defined in Rule 1080(o)(3),
coupled with a contra-side order to buy or sell an equal number of
contracts. The QCC Order must be executed at a price at or between
the NBBO and be rejected if a Customer order is resting on the
Exchange book at the same price. A QCC Order shall only be submitted
electronically from off the floor to the Exchange's match engine.
See Rule 1080(o).
    \11\ PIXL is the Exchange's price improvement mechanism known as
Price Improvement XL or (PIXL\SM\). See Rule 1080(n).
    \12\ Mini Options are further specified in Phlx Rule 1012,
Commentary .13.
    \13\ Singly Listed Options are options overlying currencies,
equities, ETFs, ETNs treasury securities and indexes not listed on
another exchange.
---------------------------------------------------------------------------

    Phlx members using an order routing functionality provided by
another member or its own functionality will continue to be required to
comply with best execution obligations.\14\ Specifically, just as with
any Customer \15\ order and any other routing functionality, a Phlx
member will continue to have an obligation to consider the availability
of price improvement at various markets and whether routing a Customer
order through a functionality that incorporates the features described
above would allow for access to such opportunities if readily
available. Moreover, a Phlx member would need to conduct best execution
evaluations on a regular basis, at a minimum quarterly, that include
its use of any router incorporating the features described above.
---------------------------------------------------------------------------

    \14\ See Phlx Rule 764.
    \15\ The term ``Customer'' applies to any transaction that is
identified by a member or member organization for clearing in the
Customer range at The Options Clearing Corporation (``OCC'') which
is not for the account of a broker or dealer or for the account of a
``Professional'' (as that term is defined in Rule 1000(b)(14)).
---------------------------------------------------------------------------

MARS Payment
    Phlx members that have System Eligibility and have executed the
Eligible Contracts in a month may receive the MARS Payment of $0.10 per
contract. The MARS Payment will be paid only on executed Firm orders
routed to Phlx through a participating member's System. No payment will
be made with respect to orders that are routed to Phlx, but not
executed. The Exchange believes that the MARS Payment will subsidize
the costs of Phlx members in providing the routing services.
    Further, a Phlx member would not be entitled to receive any other
revenue \16\ for the use of its System specifically with respect to
orders routed to Phlx, with the exception of Payment for Order
Flow.\17\
---------------------------------------------------------------------------

    \16\ This requirement would not prevent the member from charging
fees (for example, a flat monthly fee) for the general use of its
System. Nor would it prevent the member from charging fees or
commissions in accordance with its general practices with respect to
transactions effected through its System.
    \17\ The Payment for Order Flow (``PFOF'') Program assesses fees
to Specialists and Market Makers resulting from Customer orders.
These PFOF Fees are available to be disbursed by the Exchange
according to the instructions of the Specialist or Marker Maker to
order flow providers who are members or member organizations who
submit, as agent, customer orders to the Exchange through a member
or member organization who is acting as agent for those customer
orders.
---------------------------------------------------------------------------

    The Exchange proposes to add the MARS to new Section IV, Part E of
the Pricing Schedule, entitled ``Market Access and Routing Subsidy
(``MARS'').'' Additionally, the Exchange proposes to amend the Table of
Content to include the new section.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section
6(b) of the Act \18\ in general, and furthers the objectives of
Sections 6(b)(4) and 6(b)(5) of the Act \19\ 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 the Exchange operates or controls, and is not
designed to permit unfair discrimination between customers, issuers,
brokers, or dealers.
---------------------------------------------------------------------------

    \18\ 15 U.S.C. 78f(b).
    \19\ 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.'' \20\ 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.\21\ 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.'' \22\
---------------------------------------------------------------------------

    \20\ Exchange Act Release No. 34-51808 (June 9, 2005)
(``Regulation NMS Adopting Release'').
    \21\ See NetCoalition, 615 F.3d at 534.
    \22\ 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' . . ..'' \23\ Although the Court and
the SEC were discussing the cash equities markets, the Exchange
believes that, as discussed above, these views apply with equal force
to the options markets.
---------------------------------------------------------------------------

    \23\ NetCoalition I, 615 F.3d at 539 (quoting ArcaBook Order, 73
FR at 74782-74783).
---------------------------------------------------------------------------

    The Exchange believes that MARS is reasonable because it is
designed to attract higher volumes of electronic equity and ETF options
volume to the Exchange, which will benefit all Phlx market participants
by offering greater price discovery, increased transparency, and an
increased opportunity to trade on the Exchange. Moreover, the Exchange
believes that the proposed subsidy offered by MARS is both equitable
and not unfairly discriminatory because any qualifying Phlx member that
offers market access and connectivity to the Exchange and/or utilizes
such functionality themselves may earn the MARS Payment for all
Eligible Contracts.
MARS System Eligibility
    The Exchange believes that requiring Phlx members to maintain their
Systems according to the various requirements set forth by the Exchange
in order to

qualify for MARS is reasonable because the Exchange seeks to encourage
market participants to send higher volumes of orders to Phlx, which
will contribute to the Exchange's depth of book as well as to the top
of book liquidity. The Exchange also believes that the proposed MARS is
reasonable because it is designed to enhance the competitiveness of the
Exchange, particularly with respect to those exchanges that offer their
own front-end order entry system or one they subsidize in some
manner.\24\ The Exchange believes that requiring members to maintain
their Systems according to the various requirements set forth by the
Exchange in order to qualify for MARS is equitable and not unfairly
discriminatory because these requirements will uniformly apply to all
market participants desiring to qualify for MARS.
---------------------------------------------------------------------------

    \24\ See, e.g., supra note 10; Securities Exchange Act Release
No. 34-54121 (July 10, 2006), 71 FR 40566 (July 17, 2006) (SR-ISE-
2006-31) (describing PrecISE, which is a front-end, order entry
application for trading options utilized by International Securities
Exchange LLC).
---------------------------------------------------------------------------

    With respect to Complex Orders,\25\ the Exchange believes that not
requiring Phlx members to enable the electronic routing of orders to
all of the U.S. options exchanges or provide current consolidated
market data from the U.S. options exchanges, provided the transaction
was effected as a portion of a Complex Order, is reasonable because
this requirement would not make sense for Complex Orders as some
options exchanges do not offer Complex Order execution systems. Also,
Phlx members will be encouraged to provide Complex Order routing
functionalities. The Exchange believes that limiting these requirements
for Complex Orders, while still paying a subsidy on these types of
orders, is equitable and not unfairly discriminatory because Phlx
members transacting Complex Orders have devoted resources to provide
the order routing functionalities. All Phlx members that qualify for
the subsidy will have the ability to count Complex Orders toward their
Eligible Contracts and be subject to similar requirements.
---------------------------------------------------------------------------

    \25\ A Complex Order is any order involving the simultaneous
purchase and/or sale of two or more different options series in the
same underlying security, priced at a net debit or credit based on
the relative prices of the individual components, for the same
account, for the purpose of executing a particular investment
strategy. Furthermore, a Complex Order can also be a stock-option
order, which is an order to buy or sell a stated number of units of
an underlying stock or exchange-traded fund (``ETF'') coupled with
the purchase or sale of options contract(s). See Exchange Rule 1080,
Commentary .08(a)(i).
---------------------------------------------------------------------------

    The Exchange also notes that the Chicago Board of Options Exchange,
Inc. (``CBOE'') currently offers a similar Order Routing Subsidy
(``ORS'') and Complex Order Routing Subsidy (``CORS'') which, similar
to the current proposal, allows CBOE members to enter into subsidy
arrangements with CBOE Trading Permit Holders (``TPHs'') that provide
certain order routing functionalities to other CBOE TPHs and/or use
such functionalities themselves.\26\ Also, NYSE MKT LLC (``NYSE MKT'')
had a Market Access and Connectivity Subsidy (``MAC'') which allowed
NYSE MKT members to enter into subsidy arrangements with ATP Holders
that provided certain order routing functionalities to other ATP
Holders and/or use such functionalities themselves. The NYSE MKT
program was discontinued.\27\ Finally, in 2007, Phlx offered a Market
Access Provider Subsidy or ``MAPs'' as a per contract fee payable by
the Exchange to Eligible Market Access Providers for Eligible Contracts
submitted by MAPs for execution on the Exchange. The subsidy was
applicable to any Exchange member organization that qualified as a MAP
and elected to participate for that calendar month.\28\
---------------------------------------------------------------------------

    \26\ See note 43. CBOE's programs permit both CBOE members and
CBOE non-members to be eligible for a rebate. CBOE members are
eligible to receive exchange transaction fees on transactions that
earn a non-CBOE member a subsidy payment.
    \27\ See note 44. See also Securities Exchange Act Release No.
75609 (August 11, 2015), 80 FR 48132 (August 5, 2015) (SR-NYSEMKT-
2015-059).
    \28\ See Securities Exchange Act Release No. 56274 (August 16,
2007), 72 FR 48720 (August 24, 2007) (SR-Phlx-2007-54). This program
is no longer being offered.
---------------------------------------------------------------------------

MARS Eligible Contracts
    The Exchange believes that excluding the volumes attributable to
QCC Orders, PIXL and Mini Options is reasonable, equitable, and not
unfairly discriminatory for the reasons below. QCC Order volume is
already counted toward a separate rebate that the Exchange pays on both
electronic and floor QCC transactions.\29\ If the Exchange were to
count QCC Orders volumes towards the volume tiers for MARS, the
Exchange may have to raise fees for all other participants. The
Exchange does not believe such a result would be reasonable or
equitable. PIXL Orders are also subject to separate pricing and certain
discounts.\30\ Mini Options are also subject to separate pricing.\31\
The Exchange does not desire to pay an additional subsidy on top of the
already discounted rates for PIXL and Mini Options. Because all Phlx
members seeking to qualify for MARS would be treated equally with
respect to excluding QCC, PIXL and Mini Options volume, the proposal to
exclude these volumes from the MARS Payment is not inequitable or
unfairly discriminatory. With respect to excluding Singly Listed
options, these orders are not subject to a default destination
exchange, and therefore should not be taken into account in calculating
Eligible Contracts. The exclusion of these types of orders from MARS is
equitable and not unfairly discriminatory because the Exchange will
uniformly exclude these orders from the Eligible Contracts for all
qualifying Phlx members.
---------------------------------------------------------------------------

    \29\ See notes 10 and 39.
    \30\ See Phlx's Pricing Schedule at Section IV, Part A. The
Exchange offers discounted fees provided certain criteria are met.
    \31\ See Section A of the Phlx Pricing Schedule.
---------------------------------------------------------------------------

    With respect to floor orders, the Exchange's exclusion of such
orders from Eligible Contracts is reasonable because the floor model
does not lend itself to this type of incentive which requires the
maintenance of a front-end system to route orders. The Exchange has two
different methods of handling orders. The non-electronic model is one
that is represented on the trading floor by a floor broker. An
electronic order is an entirely different model. Those orders are
entered by members who are connected to the Phlx's match engine. These
members are assessed different rates because the Exchange operates two
different models, a floor-based model and an electronic model, which
both utilize different processes. The Exchange believes that it is
appropriate to assess fees and incentivize through rebates and
subsidies differently for each model. With respect to floor orders, the
Exchange's exclusion of such order from MARS is equitable and not
unfairly discriminatory because the Exchange will not permit any floor
orders to count toward Eligible Contracts for any market participant
for MARS.
    The Exchange further notes that while MARS is only being offered to
qualifying Phlx members for electronically-executed Firm, Broker-
Dealer, JBO or Professional equity option orders and not, for example,
on the electronic volumes of Phlx Customer, Specialist \32\ or Market
Maker \33\ the Exchange believes this is reasonable, equitable and not
unfairly

discriminatory for the reasons below. With respect to Customer orders,
the Exchange notes that Customer orders have the ability to earn
rebates today.\34\ Additionally, Customers are not assessed transaction
fees.\35\ The Exchange believes that the availability of these rebates
for Customer volumes as well as no transaction fees does not warrant
paying an additional subsidy on Customer volumes in MARS. With respect
to Specialists and Market Makers, the Exchange offers Specialists and
Market Makers certain rebates in SPY,\36\ assesses them lower
transaction fees as compared to other market participants \37\ and
offers them the ability cap their transaction fees.\38\ The Exchange
believes that the SPY rebates, coupled with the lower transaction fees
and Monthly Market Maker Cap, already provide ample incentive for
attracting Specialist and Market Maker volumes to the Exchange and that
no further subsidy is warranted at this time.
---------------------------------------------------------------------------

    \32\ A Specialist is an Exchange member who is registered as an
options specialist pursuant to Rule 1020(a). An options Specialist
includes a Remote Specialist which is defined as an options
specialist in one or more classes that does not have a physical
presence on an Exchange floor and is approved by the Exchange
pursuant to Rule 501.
    \33\ A ``market maker'' includes Registered Options Traders
(Rule 1014(b)(i) and (ii)), which includes Streaming Quote Traders
(see Rule 1014(b)(ii)(A)) and Remote Streaming Quote Traders (see
Rule 1014(b)(ii)(B)). Directed Participants are also market makers.
    \34\ See Section B of the Phlx Pricing Schedule.
    \35\ See Section II of the Phlx Pricing Schedule.
    \36\ See Section I of SPY Pricing in Phlx Pricing Schedule.
    \37\ See Section II of the Phlx Pricing Schedule.
    \38\ Specialists and Market Makers are subject to a ``Monthly
Market Maker Cap'' of $550,000 for: (i) Electronic and floor Option
Transaction Charges; (ii) QCC Transaction Fees (as defined in
Exchange Rule 1080(o) and Floor QCC Orders, as defined in 1064(e));
and (iii) fees related to an order or quote that is contra to a PIXL
Order or specifically responding to a PIXL auction. The trading
activity of separate Specialist and Market Maker member
organizations is aggregated in calculating the Monthly Market Maker
Cap if there is Common Ownership between the member organizations.
All dividend, merger, short stock interest, reversal and conversion,
jelly roll and box spread strategy executions (as defined in Section
II) are excluded from the Monthly Market Maker Cap.
---------------------------------------------------------------------------

    The proposed MAC Subsidy is designed to attract higher margin
business to the Exchange, business which at present has no opportunity
to transact at rates anywhere close to the rate assessed to Customers,
Specialists or Market Makers. To offer the proposed subsidy on
Customer, Specialist or Market Maker electronic volume would require
funding from some other source, such as raising fees for other
participants. As a result, the Exchange believes it is appropriate to
offer MARS to only Firms, Broker-Dealers and JBO participants that are
charged higher per contract transaction fees than other market
participants. The Exchange notes that it is commonplace within the
options industry for exchanges to charge different rates and/or offer
different rebates depending upon the capacity in which a participant is
trading. For these reasons, the Exchange believes that the proposed
change to offer MARS Payment to qualifying Phlx members on certain
electronic volumes is reasonable, equitable and not unfairly
discriminatory for the reasons mentioned herein.
    Finally, the Exchange believes that 30,000 Eligible Contracts is a
reasonable level of contracts, because the Exchange is only counting
volume from Firms, Broker-Dealers, JBOs and Professionals which are
electronically delivered and executed. The Exchange believes that this
number reflects an appropriate level of commitment from Phlx members to
earn the MARS Payment. The Exchange believes that 30,000 Eligible
Contracts is equitable and not unfairly discriminatory because this
level will be uniformly applied to all qualifying Phlx members.
MARS Payment
    The Exchange believes that it is reasonable, equitable and not
unfairly discriminatory to pay the proposed MARS Payment to Phlx
members that have System Eligibility and have executed the Eligible
Contracts, even when a different Phlx member may be liable for
transaction charges resulting from the execution of the orders upon
which the subsidy might be paid. The Exchange notes that this sort of
arrangement already exists on the Exchange with respect to QCC rebates
for floor QCC transactions. Today, this arrangement results in a
situation where the floor broker is earning a rebate and one or more
different Phlx members are potentially liable for the Exchange
transaction charges applicable to QCC Orders. With the QCC rebates
applicable to transactions executed on the trading floor, the Exchange
does not offer a front-end for order entry; unlike some of the
competing exchanges, the Exchange believes it is necessary from a
competitive standpoint to offer this rebate to the executing floor
broker on a QCC Order. Also, all qualifying Phlx members would be
uniformly paid the subsidy on all qualifying volume that was routed by
them to the Exchange and executed.
    The Exchange believes the $0.10 per contract rate that is being
offered to be paid as a subsidy is reasonable and will allow Phlx
members to price their services at a level that will enable them to
attract order flow from participants who would otherwise utilize an
existing front-end order entry mechanism offered by the Exchange's
competitors instead of incurring the cost in time and money to develop
their own internal systems to be able to deliver orders directly to the
Exchange's trading systems.\39\ The Exchange believes that offering a
flat rate is reasonable because all qualifying Phlx members would
receive the same $0.10 per contract subsidy, provided they met the
qualifications for MARS.
---------------------------------------------------------------------------

    \39\ A Floor QCC Order must: (i) Be for at least 1,000
contracts, (ii) meet the six requirements of Rule 1080(o)(3) which
are modeled on the QCT Exemption, (iii) be executed at a price at or
between the NBBO; and (iv) be rejected if a Customer order is
resting on the Exchange book at the same price. In order to satisfy
the 1,000-contract requirement, a Floor QCC Order must be for 1,000
contracts and could not be, for example, two 500-contract orders or
two 500-contract legs. See Rule 1064(e). See also Securities
Exchange Act Release No. 64688 (June 16, 2011), 76 FR 36606 (June
22, 2011) (SR-Phlx-2011-56).
---------------------------------------------------------------------------

    The Exchange believes that paying the MARS payments to a Phlx
member, solely on executed Firm orders submitted by the qualifying Phlx
member, is reasonable because, as noted herein Customers, Specialists
and Market Makers are offered other pricing incentives such as rebates,
no fees or lower fees and the Monthly Market Maker Cap. With respect to
Professionals, JBOs and Broker-Dealers the Exchange believes it is
reasonable to differentiate these market participants and Firms for the
reasons which follow. Firms already benefit from certain pricing
advantages that Professionals, JBOs and Broker-Dealers do not also
enjoy, such as the Firm Monthly Fee Cap.\40\ The Exchange desires to
incentivize Phlx members to transact Firm, JBO, Broker-Dealer and
Professional orders on the Exchange to qualify for MARS and receive the
subsidy for Firm orders. The Exchange believes that this proposal may
incentivize Phlx members that receive reduced rates at other options
exchanges to select Phlx as a venue to send Firm, JBO, Broker-Dealer
and Professional orders by offering competitive pricing to these market
participants in the form of a subsidy, even though the financial
benefit will only be made with respect to Firm orders. Such
competitive, differentiated pricing exists today on other options
exchanges. Further, the Exchange believes there is nothing
impermissible about the MARS Payment

being made solely on Firm orders. This practice is consistent with
longstanding differentials between Firms, other Broker-Dealers and
Professionals. The options exchanges have differentiated between:
retail customers and professional customers; broker/dealers clearing in
the ``Firm'' range at OCC and broker/dealers registered as market
makers and away market makers; early-adopting market makers; and many
others. The Commission has also permitted price differentiation based
on whether an order is processed manually versus electronically. The
proposal is consistent with previously established pricing proposals
accepted by the Commission.
---------------------------------------------------------------------------

    \40\ Firms are subject to a maximum fee of $75,000 (``Monthly
Firm Fee Cap''). Firm Floor Option Transaction Charges and QCC
Transaction Fees, in the aggregate, for one billing month may not
exceed the Monthly Firm Fee Cap per member organization when such
members are trading in their own proprietary account. All dividend,
merger, and short stock interest strategy executions (as defined in
Section II of the Pricing Schedule) are excluded from the Monthly
Firm Fee Cap. Reversal and conversion, jelly roll and box spread
strategy executions (as defined in Section II) are included in the
Monthly Firm Fee Cap. QCC Transaction Fees are included in the
calculation of the Monthly Firm Fee Cap. See Section II of the
Pricing Schedule.
---------------------------------------------------------------------------

    The Exchange believes that paying the MARS payments to a Phlx
member, solely on executed Firm orders submitted by the qualifying Phlx
member, is equitable and not unfairly discriminatory for the same
reasons that the Firm Monthly Fee Cap which applies to Firms and not to
Professionals and Broker-Dealers is equitable and not unfairly
discriminatory. The MARS Payment, like the Monthly Firm Fee Cap,
provides an incentive for Firms to transact order flow on the Exchange,
which order flow brings increased liquidity to the Exchange for the
benefit of all Exchange participants. To the extent the purpose of the
proposed MARS is achieved, all the Exchange's market participants,
including Professionals and Broker-Dealers, should benefit from the
improved market liquidity.
    The Exchange believes that preventing members from receiving any
other revenue for the use of its routing system, specifically with
respect to orders routed to Phlx, with the exception of Payment for
Order Flow or ``PFOF'' is reasonable because members could still charge
fees for the general use of its order routing system as well as
charging fees or commissions in accordance with its general practices
with respect to transactions effected through its system. PFOF also
remains eligible under MARS. The Exchange believes that preventing
members from receiving any other revenue for the use of its routing
system, specifically with respect to orders routed to Phlx, with the
exception of PFOF is equitable and not unfairly discriminatory because
the Exchange would uniformly apply its MARS requirements to all
qualifying Phlx members.
    Finally, the Exchange believes that adding a new Part E to Section
IV and amending the Table of Content is reasonable, equitable and not
unfairly discriminatory as it will make finding MARS in the Pricing
Schedule easier for all participants.

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.
MARS System Eligibility
    The Exchange believes that requiring members to maintain their
order routing systems according to the various requirements set forth
by the Exchange in order to qualify for MARS does not create an undue
burden on intra-market competition because the proposed requirements
will uniformly apply to all market participants desiring to qualify for
MARS.
    With respect to Complex Orders, the Exchange believes that not
requiring the Phlx members to enable the electronic routing of orders
to all of the U.S. options exchanges and not requiring Phlx members to
provide current consolidated market data from the U.S. options
exchanges, in connection with Complex Orders, does not create an undue
burden on intra-market competition because all Phlx members that
qualify for the subsidy will have the ability to count Complex Orders
toward their Eligible Contracts and be subject to similar requirements.
The Exchange also notes that CBOE currently offers ORS and CORS which,
similar to the current proposal, allow CBOE members to enter into
subsidy arrangements with TPHs that provide certain order routing
functionalities to other CBOE TPHs and/or use such functionalities
themselves.\41\
---------------------------------------------------------------------------

    \41\ See note 43. CBOE's programs permit both CBOE members and
CBOE non-members to be eligible for a rebate. CBOE members are
eligible to receive exchange transaction fees on transactions that
earn a non-CBOE member a subsidy payment.
---------------------------------------------------------------------------

MARS Eligible Contracts
    The Exchange believes that excluding floor, QCC, PIXL, Mini Options
and Single Listed Orders does not create an undue burden on intra-
market competition because these types of orders will uniformly be
excluded from the volume calculation for all qualifying Phlx members
for MARS.
    The Exchange believes that excluding Customer, Market Makers and
Specialists orders from the types of orders that would be eligible for
MARS does not create an undue burden on intra-market competition
because Customers are not assessed transaction fees and are eligible
for rebates. With respect to Specialists and Market Makers, the
Exchange offers as Specialists and Market Makers certain rebates in
SPY, assesses them lower transaction fees as compared to other market
participants and offers them the ability cap their transaction fees.
    Finally, the Exchange believes that the 30,000 Eligible Contracts
requirement does not create an undue burden on intra-market competition
because this level will be uniformly applied to all qualifying Phlx
members.
MARS Payment
    The Exchange believes that paying the proposed MARS Payment to
qualifying Phlx members that have System eligibility and have executed
the Eligible Contracts does not create an undue burden on intra-market
competition, even when a different Phlx member, other than the Phlx
member receiving the subsidy, may be liable for transaction charges,
because this sort of arrangement already exists on the Exchange and
would be uniformly applied to all qualifying Phlx members.
    The Exchange believes that paying the proposed MARS Payment to
qualifying Phlx members that have System eligibility and have executed
the Eligible Contracts in a month, solely on executed Firm orders, does
not create an undue burden on intra-market competition because the
Exchange is counting all Firm, JBO, Broker-Dealer and Professional
volume toward the Eligible Contracts. Customers, Specialists and Market
Makers are offered other pricing incentives such as rebates, no fees or
lower fees and the Monthly Market Maker Cap. The increased order flow
will bring

increased liquidity to 50the Exchange for the benefit of all Exchange
participants. To the extent the purpose of the proposed MARS is
achieved, all the Exchange's market participants, including
Professionals and Broker-Dealers, should benefit from the improved
market liquidity.
    The Exchange believes that preventing members from receiving any
other revenue for the use of its routing system, specifically with
respect to orders routed to Phlx, with the exception of PFOF, does not
create undue burden on intra-market competition because the Exchange
would continue to uniformly apply its MARS requirements to all Phlx
members.

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.\42\
---------------------------------------------------------------------------

    \42\ 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-2015-89 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-2015-89. 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 such 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-2015-89, and should be
submitted on or before December 11, 2015.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\43\
---------------------------------------------------------------------------

    \43\ 17 CFR 200.30-3(a)(31).
---------------------------------------------------------------------------

Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-29602 Filed 11-19-15; 8:45 am]
BILLING CODE 8011-01-P


	United States

Environmental Protection Agency	Office of Water

4304T	  SEQ CHAPTER \h \r 1 EPA-822-F-09-002

April 2009

	Notice of Data Availability on   SEQ CHAPTER \h \r 1 Ocean
Acidification and Marine pH Water Quality Criteria

EPA has published a Notice of Data Availability (NODA) to provide
interested parties with information that was submitted to EPA regarding
ocean acidification and to solicit additional pertinent data or
scientific information that may be useful in addressing ocean
acidification.  In addition, EPA is notifying the public of its intent
to review the current aquatic life criterion for marine pH to determine
if a revision is warranted to protect the marine designated uses of
states and territories pursuant to Clean Water Act §304(a)(1). The NODA
also solicits ideas for effective strategies by state and territorial
water program managers to address the impacts of ocean acidification.
EPA also requests information pertaining to monitoring marine pH and
implementing pH water quality criteria.

Background

Ocean acidification refers to the decrease in the pH of the oceans
caused by the uptake of carbon dioxide (CO2) from the atmosphere.
Oceans have been absorbing about one-third of the anthropogenic CO2
emitted into the atmosphere since pre-industrial times.  As more CO2
dissolves in the ocean, it reduces ocean pH, which changes the chemistry
of the water.  These changes present potential risks across a broad
spectrum of marine ecosystems.

The marine or saltwater pH criteria EPA recommended pursuant to Section
304(a) of the CWA applies to coastal waters specifically.  States,
territories and authorized tribes adopt saltwater pH criteria into their
water quality standards, as appropriate, to protect the designated use
of the coastal waters within their jurisdiction.  EPA received a
petition from the Center for Biological Diversity (CBD) requesting that
EPA revise its recommended national marine pH water quality criterion
for the protection of aquatic life and asking EPA to publish information
and provide guidance on ocean acidification.

EPA has agreed to publish a NODA in the Federal Register to present
available information on this issue and to solicit scientific views on
the following specific issues:

Technical information on measurement of ocean acidification in marine
coastal waters.

Technical information on effects of ocean acidification on marine biota.

Scientific views on the information presented in the bibliography
provided in the notice.

Information related to the existing recommended pH criterion for marine
waters, including how the criterion could be best expressed,
particularly with respect to natural variability.

Information regarding state and territorial implementation of the pH
criterion related to new information on ocean acidification.

Potential strategies for state and federal water programs to coordinate
and enhance federal data collection efforts.

Information that may be used to develop guidance and information on
ocean acidification pursuant to Clean Water Act Section 304(a)(2) for
states and the public.

After the comment period for the NODA closes, EPA plans to evaluate the
information and data it has received on ocean acidification.  EPA
intends to make a final decision, within one year of the date of
publication of the NODA, on whether revisions to the current pH water
quality criterion are needed.

To get more information, contact Joe Beaman at<PHONE_NUMBER> or
HYPERLINK<EMAIL_ADDRESS><EMAIL_ADDRESS>or Lisa Huff
at<PHONE_NUMBER> or   HYPERLINK<EMAIL_ADDRESS><EMAIL_ADDRESS>.

  PAGE   2


[Federal Register: April 9, 2009 (Volume 74, Number 67)]
[Notices]
[Page 16255-16256]
[DOCID:fr09ap09-119]

=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

Notice of Intent To Prepare an Environmental Impact Statement for
the George Bush Intercontinental Airport, Houston, TX and To Conduct
Public Scoping Meetings

AGENCY: Federal Aviation Administration (FAA), Department of
Transportation (DOT).

ACTION: Notice of Intent to prepare an environmental impact statement
(EIS) and to conduct public scoping meetings.

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

SUMMARY: The FAA is issuing this Notice of Intent to advise the public
that the FAA will prepare an EIS under the provisions of the National
Environmental Policy Act (NEPA) of 1969, as amended. The EIS will
address proposed improvements to George Bush Intercontinental Airport
(IAN). The Houston Airport System (HAS), the sponsor of the project,
completed an Airport Master Plan (AMP) for IAN in 2006. The AMP showed
that additional airfield capacity was needed. Airfield improvements
including additional runway(s) were recommended to meet future capacity
and reduce projected delays at IAH.
    Based on analysis presented in the AMP, FAA concurred that
additional capacity was needed to meet forecast demand and began the
EIS process. One of the first tasks in the process was to update the
aviation forecast because of the decline in aviation operations since
the AMP was completed. An updated forecast of aircraft operations was
completed and reconfirmed the need to provide for additional capacity
at IAH.
    The EIS will document the purpose and need for the proposed
improvements as well as analyze a range of alternatives such as use of
other modes of transportation or airports, construction of airfield
improvements and as required by NEPA, the no action alternative. It is
anticipated that the focus of the analysis will be on airfield
improvement alternatives including: altering runway use and/or
constructing taxiways; constructing a new runway between Runways 8L/26R
and 8R/26L; and constructing a new runway south of Runway 9/27. To
comply with NEPA, the FAA must also evaluate the potential
environmental impacts of each of the reasonable alternatives such as
and not limited to: noise impacts, impacts on air and water quality,
wetlands, fish, wildlife, plants, floodplains, historic resources,
hazardous wastes, socioeconomics, and economic factors.

FOR FURTHER INFORMATION CONTACT: Federal Aviation Administration,
Airports Division, Attn: Paul Blackford, ASW-652B, 2601 Meacham
Boulevard, Fort Worth, TX 76137, E-mail<EMAIL_ADDRESS>
Phone:<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION: The purpose of this notice is to inform
federal, state, and local government agencies and the public, of FAA's
intent to prepare an EIS and to conduct a public and agency scoping
process. Information, data, opinions, and comments obtained throughout
the scoping process will be considered in the preparation of the draft
EIS. The scoping process for this EIS will include a comment period for
interested agencies and parties to submit oral and/or written comments
representing the concerns and issues they believe the EIS should
address.
    Scoping Meetings: The purpose of the scoping meetings is to receive
input from the public and agencies regarding the scope and process
related to the EIS. Comments and suggestions are invited from all
interested parties to ensure that issues and concerns related to the
proposed action and its alternatives are addressed. Public and agency
scoping meetings will be conducted to encourage submittal of comments
to the FAA.
    Public scoping meetings will be held from 6 to 9 p.m. on May 12,
2009, at the Humble Civic Center and May 14, 2009, at the Nimitz High
School. Each meeting will include an introductory presentation,
exhibits for team members to further explain the project and process,
and opportunities to submit oral or written comments. To notify the
general public of the scoping process, a legal notice will be placed in
newspapers having general circulation in the study area. The newspaper
notice will notify the public that scoping meetings will be held to
gain public input concerning the proposed action, alternatives to be
considered, and environmental impacts to be evaluated. The notice will
also identify where the scoping package will be available for review.
    An agency scoping meeting for all federal, state, and local
regulatory agencies which have jurisdiction by law or have special
expertise with respect to any potential environmental impacts
associated with the proposed action will be held from 1:30 to 3:30 p.m.
on May 12, 2009 at the Humble Civic Center. A notification letter along
with a scoping package will be sent in advance of those meetings.
    The Scoping Meetings provide the first major opportunity for
gathering comments from agency representatives and the general public.
Comments received at the meetings, or by mail, e-mail and via the Web
site (http://www.iah-eis.org) by June 15, 2009, will be included in the
Scoping Report and considered for inclusion in the EIS. The Final
Scoping Report will be made available to the public on the Web site.
    In addition to preparing the EIS to fulfill the requirements of
NEPA, the FAA will prepare the EIS in order to comply with other
applicable laws having public involvement requirements. Comments
addressing other applicable laws should be

submitted to the listed contact person. Further information about the
EIS and the proposed action will be posted when available at http://
www.iah-eis.org.

    Issued in Fort Worth, Texas, on March 30, 2009.
Mike Nicely,
Acting Manager, Airports Division.
[FR Doc. E9-7693 Filed 4-8-09; 8:45 am]

BILLING CODE 4910-13-M