[Federal Register Volume 77, Number 239 (Wednesday, December 12, 2012)]
[Notices]
[Pages 74039-74041]
[FR Doc No: 2012-29965]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-68376; File No. SR-Phlx-2012-139]

Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change Relating to
Complex Orders

December 6, 2012.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 \2\ thereunder, notice is hereby given
that, on December 3, 2012, NASDAQ OMX PHLX LLC (``Phlx'' or
``Exchange'') filed with the Securities and Exchange Commission
(``SEC'' or ``Commission'') the proposed rule change as described in
Items I, II, and III below, which Items have been prepared by the
Exchange. The Commission is publishing this notice to solicit comments
on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange proposes to amend Section I, Part B of the Exchange's
Pricing Schedule entitled ``Rebates and Fees for Adding and Removing
Liquidity in Select Symbols'' to apply a fee differential approved by
the Commission.
    The text of the proposed rule change is available on the Exchange's
Web site at http://www.nasdaqtrader.com/micro.aspx?id=PHLXfilings, 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 Exchange filed two immediately effective rule changes, SR-Phlx-
2012-27 and SR-Phlx-2012-54,\3\ to amend certain fees and rebates in
Section I, which filings were temporarily suspended by the Commission
as of April 30, 2012 (``Suspension Order'').\4\ On November 9, 2012,
the Commission approved SR-Phlx-2012-27 and SR-Phlx-2012-54, as
modified by Amendment No. 1, on a one-year pilot basis, with such fees
being operative on December 3, 2012 (``Approval Order'').\5\
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    \3\ See Securities Exchange Act Release Nos. 66551 (March 9,
2012), 77 FR 15400 (March 15, 2012) (SR-Phlx-2012-27) and 66883
(April 30, 2012), 77 FR 26591 (May 4, 2012) (SR-Phlx-2012-54).
    \4\ By order dated April 30, 2012, the Commission suspended SR-
Phlx-2012-27 and SR-Phlx-2012-54. See Securities Exchange Release
No. 66884 (April 30, 2012), 77 FR 26595 (May 4, 2012) (SR-Phlx-2012-
27and SR-Phlx-2012-54).
    \5\ See Securities Exchange Act Release No. 68202 (November 9,
2012), 77 FR 68856 (November 16, 2012) (SR-Phlx-2012-27 and SR-Phlx-
2012-54).
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    The Approval Order approved certain fees that were proposed by the
Exchange in SR-Phlx-2012-27.\6\ The Exchange proposes, pursuant to the
Approval Order, to reinstate the Complex Order pricing differential
that was suspended on April 30, 2012. In SR-Phlx-2012-27, the Exchange
filed to amend various fees.\7\ The fees for execution of Complex
Orders by Directed Participants and Market Makers became the subject of
the Suspension Order. Specifically, the Exchange filed to amend the
Directed Participant Complex Order Fee for Removing Liquidity from
$0.30 to $0.32 per contract and the Marker Maker Complex Order Fee for
Removing Liquidity from $0.32 to $0.37 per contract.\8\ On April 30,
2012, the Commission suspended both SR-Phlx-2012-27 and a related
filing SR-Phlx-2012-54 and instituted proceedings to determine whether
the Exchange's proposed rule changes should be approved or
disapproved.\9\ The proposed $0.05 per contract Complex Order
differential as between Directed Participants and Market Makers was
suspended and the $0.02 fee differential was reinstated as of April 30,
2012.\10\ The subsequent Approval Order approved the fees related to
Complex Orders on a one-year pilot basis operative on December 3,
2012.\11\ Since the date of the Suspension Order, the Exchange has
filed amendments to Section I of its Pricing Schedule which amended
certain fees and also the categories of market participants.\12\
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    \6\ Specifically, SR-Phlx-2012-27 proposed, among other things,
to: (1) Increase the Customer Complex Order Rebate for Adding
Liquidity from $0.30 to $0.32 per contract, (2) create a new Complex
Order Rebate for Removing Liquidity and specifically pay a Customer
a $0.06 Complex Order Rebate for Removing Liquidity, and (3)
increase the Complex Order Fees for Removing Liquidity for Firms,
Broker-Dealers and Professionals from $0.35 per contract to $0.38
per contract.
    \7\ See Securities Exchange Act Release No. 66551 (March 9,
2012), 77 FR 15400 (March 15, 2012) (SR-Phlx-2012-27).
    \8\ Id.
    \9\ The Commission noted in the Suspension Order that it ``* * *
believes it is appropriate to further evaluate the potential effect
of the proposed rule changes on competition among different types of
market participants and on market quality, particularly with respect
to the fee differential between Directed Participants and Market
Makers, and the basis for such differential put forth by the
Exchange.'' See Securities Exchange Release No. 66884 (April 30,
2012), 77 FR 26595, 26596 (May 4, 2012) (SR-Phlx-2012-27and SR-Phlx-
2012-54).
    \10\ By order dated April 30, 2012, the Commission suspended SR-
Phlx-2012-27 and SR-Phlx-2012-54. See Securities Exchange Release
No. 66884 (April 30, 2012), 77 FR 26595 (May 4, 2012) (SR-Phlx-2012-
27 and SR-Phlx-2012-54).
    \11\ See Securities Exchange Act Release No. 68202 (November 9,
2012), 77 FR 68856 (November 16, 2012) (SR-Phlx-2012-27 and SR-Phlx-
2012-54).
    \12\ See Securities Exchange Act Release Nos. 67189 (June 12,
2012), 77 FR 36310 (June 18, 2012) (SR-Phlx-2012-77) (an immediately
effective rule filing which, among other things, amended the Complex
Order Directed Participant fee from $0.34 to $0.36 per contract and
noted that the Complex Order fee for Removing Liquidity, applicable
to Specialists and Market Makers, will be decreased by $0.02 per
contract when the Specialist or Market Maker transacts against a
Customer order directed to them. This filing also established the
category of Specialist); and 67633 (August 9, 2012), 77 FR 49040
(August 15, 2012) (SR-Phlx-2012-104) (an immediately effective rule
filing, which, among other things, amended the Complex Order
Specialist and Market Maker fees from $0.36 to $0.39 per contract).
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    The Exchange amended its categories of market participants to
specifically define a Specialist \13\ separate and apart from other
Market Makers.\14\ At the time of the Suspension Order, the Exchange
defined a Market Maker to include Specialists and Registered Options
Traders.\15\ The Exchange redefined a

Market Maker to include ROTs, SQTs and RSQTs. The Exchange eliminated
the category ``Directed Participant'' \16\ from the categories of
market participants, and instead added Specialists as a category of
market participants.\17\
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    \13\ A ``Specialist'' is an Exchange member who is registered as
an options specialist pursuant to Rule 1020(a).
    \14\ See Securities Exchange Act Release No. 67189 (June 12,
2012), 77 FR 36310 (June 18, 2012) (SR-Phlx-2012-77).
    \15\ A Registered Options Trader (``ROT'') includes a Streaming
Quote Trader (``SQT''), a Remote Streaming Quote Trader (``RSQT'')
and a Non-SQT, which by definition is neither a SQT or a RSQT. A ROT
is defined in Exchange Rule 1014(b) as a regular member of the
Exchange located on the trading floor who has received permission
from the Exchange to trade in options for his own account. See
Exchange Rule 1014 (b)(i) and (ii).
    \16\ The term ``Directed Participant'' applies to transactions
for the account of a Specialist, Streaming Quote Trader or Remote
Streaming Quote Trader resulting from a Customer order that is (1)
directed to it by an order flow provider, and (2) executed by it
electronically on Phlx XL II.
    \17\ See Securities Exchange Act Release Nos. 67189 (June 12,
2012), 77 FR 36310 (June 18, 2012) (SR-Phlx-2012-77).
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    The Exchange is therefore proposing to amend the Pricing Schedule
to reflect the $0.05 fee differential between Market Makers and
Specialists that execute directed Complex Orders and those that do not
that was proposed in SR-Phlx-2012-27 and SR-Phlx-2012-54. The Exchange
also proposes to state in the Pricing Schedule that the fee
differential is subject to a one-year pilot. The Exchange proposes
these amendments become operative on December 3, 2012 consistent with
the Approval Order.\18\
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    \18\ See Securities Exchange Act Release No. 68202 (November 9,
2012), 77 FR 68856 (November 16, 2012) (SR-Phlx-2012-27 and SR-Phlx-
2012-54).
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2. Statutory Basis
    The Exchange believes that its proposal to amend its Pricing
Schedule is consistent with Section 6(b) of the Act \19\ in general,
and furthers the objectives of Section 6(b)(4) of the Act \20\ in
particular, in that it is an equitable allocation of reasonable fees
and other charges among Exchange members and other persons using its
facilities.
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    \19\ 15 U.S.C. 78f(b).
    \20\ 15 U.S.C. 78f(b)(4).
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    The Exchange also believes that it is an equitable allocation of
reasonable rebates among Exchange members and other persons using its
facilities.
    On November 9, 2012, the Commission approved SR-Phlx-2012-27 and
SR-Phlx-2012-54, as modified by Amendment No. 1, on a one-year pilot
basis, with such fees being operative on December 3, 2012 (``Approval
Order'').\21\ Pursuant to that Approval Order and the reasons
articulated therein, the Exchange is modifying its Pricing Schedule to
reflect the $0.05 per contract Complex Order fee differential that was
proposed in SR-Phlx-2012-27 and SR-Phlx-2012-54 and approved. This
filing incorporates the $0.05 per contract Complex Order fee
differential that was recently approved by the Commission.\22\
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    \21\ See Securities Exchange Act Release No. 68202 (November 9,
2012), 77 FR 68856 (November 16, 2012) (SR-Phlx-2012-27 and SR-Phlx-
2012-54).
    \22\ To the extent that the Approval Order modified the
Exchange's Pricing Schedule by restoring a previous amendment which
was not the subject of the Approval Order, the Exchange addresses
those amendments in a separate rule change. See SR-Phlx-2012-137
(not yet published).
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    This proposal does not amend the current pricing in Section I, Part
B of the Pricing Schedule other than to offer discounted pricing to
Market Makers and Specialists when the Market Maker or Specialist
transacts against a Customer Order directed to them by increasing the
Complex Order Fee for Removing Liquidity discount from $0.02 to $0.05
per contract, consistent with the Approval Order.\23\
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    \23\ See Securities Exchange Act Release No. 68202 (November 9,
2012), 77 FR 68856 (November 16, 2012) (SR-Phlx-2012-27 and SR-Phlx-
2012-54).
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    The Exchange believes that the proposed amendments are consistent
with the Act because the proposal merely incorporates amendments
approved by the Commission pursuant to an Approval Order.\24\
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    \24\ Id.
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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. Further, the Exchange notes
that the Market Maker and Specialists Complex Order Fees for Removing
Liquidity currently in place at the Exchange apply only to certain
Select Symbols which are Multiply-Listed and highly liquid securities.
As described herein, the Exchange's fees are comparable to and lower
than other fee differentials today at other options exchanges. Given
the highly competitive environment for options trading and the
attendant benefits to investors, the Exchange believes that no exchange
has market power sufficient to raise prices for competitively-traded
options in an unreasonable or unfairly discriminatory manner in
violation of the Exchange Act. In actuality, it is member firms that
control the order flow that options markets compete to attract as
evidenced by the large number of pricing-related rule changes and
shifts of market share among options markets.

C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others

    No written comments were either solicited or received.

III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action

    The foregoing rule change has become effective pursuant to Section
19(b)(3)(A)(ii) of the Act.\25\ At any time within 60 days of the
filing of the proposed rule change, the Commission summarily may
temporarily suspend such rule change if it appears to the Commission
that such action is necessary or appropriate in the public interest,
for the protection of investors, or otherwise in furtherance of the
purposes of the Act. If the Commission takes such action, the
Commission shall institute proceedings to determine whether the
proposed rule should be approved or disapproved.
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    \25\ 15 U.S.C. 78s(b)(3)(A)(ii).
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IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-Phlx-2012-139 on the subject line.

Paper Comments

     Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street NE.,
Washington, DC 20549-1090.

All submissions should refer to File Number SR-Phlx-2012-139. 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-2012-139 and should be
submitted on or before January 2, 2013.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\26\
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    \26\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-29965 Filed 12-11-12; 8:45 am]
BILLING CODE 8011-01-P


Walt Stevenson/ RTP/ USEPA/ US 04/ 24/ 2006 02: 51 PM T o etoy@ omb. eop. gov c c RobertJ Wayland/ RTP/ USEPA/ US@ EPA S u b j e c t Fw: LMWC Preamble text Edmond Here is the revised " impacts" text for page 32 of the preamble take care walt IV. Impacts of the Final Amendments for Existing Units The EPA projects the final amendments will have no additional impacts to air, water, or energy since the final emission limits can be achieved using the same air pollution control technology that was used to comply with the current emission limits.

Similarly, EPA expects minimal cost and no economic impact for the same reason. Existing large MWC units will continue to use their existing MACT control technology to meet the emission limits, and will not incur costs to retrofit equipment. The same conclusions apply to new MWC units since EPA expects that new MWC units will be equipped with the same control technology used to comply with the 1995 NSPS. V. Statutory and Executive Order Reviews