SUPPORTING STATEMENT FOR EPA INFORMATION COLLECTION REQUEST NUMBER 1823.03 A REPORTING AND RECORD KEEPING REQUIREMENTS UNDER THE PFC REDUCTION/ CLIMATE PARTNERSHIP FOR THE SEMICONDUCTOR INDUSTRY@

November 12, 2004 TABLE OF CONTENTS 1. IDENTIFICATION OF THE INFORMATION COLLECTION          .. . .1 1( a) Title of the Information Collection................................................................................... 1 1( b) Short Characterization..................................................................................................... 1 2. NEED FOR AND USE OF THE COLLECTION.                . . 2 2( a) Need and Authority for the Collection.............................................................................. 2 2( b) Practical Utility and Users of the Data.............................................................................. 2 2( c) Assessment of Partnership= s Achievements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. .3 3. NONDUPLICATION, CONSULTATIONS, AND OTHER COLLECTION CRITERIA                  ...             5 3( a) Nonduplication ................................................................................................................ 5 3( b) Public Notice Request Prior to ICR Submission to OMB................................................. 5 3( c) Consultations................................................................................................................... 5 3( d) Effects of Less Frequent Collection.................................................................................. 6 3( e) General Guidelines........................................................................................................... 6 3( f) Confidentiality ................................................................................................................. 6 3( g) Sensitive Questions.......................................................................................................... 7 4. THE RESPONDENTS AND THE INFORMATION REQUESTED      .. . . . . . .7 4( a) Respondents/ SIC and NAICS Codes................................................................................ 7 4( b) Information Requested..................................................................................................... 7 5. THE INFORMATION COLLECTED AGENCY ACTIVITIES, COLLECTION METHODOLOGY, AND INFORMATION MANAGEMENT . . . . . . . . . . . . . . . . . . 10 5( a) Agency Activities........................................................................................................... 11 5( b) Collection Methodology and Management. .................................................................... 11 5( c) Small Entity Flexibility................................................................................................... 11 5( d) Collection Schedule ....................................................................................................... 11 6. ESTIMATING THE BURDEN AND COST OF THE COLLECTION. . . . . . . . . . . . 12 6( a) Estimating Respondent Burden...................................................................................... 12 6( b) Estimating Respondent Costs......................................................................................... 12 6( c) Estimating Agency Burden and Cost .............................................................................. 13 6( d) Estimating the Respondent Universe and Total Burden and Costs .................................. 13 6( e) Bottom Line Burden Hours and Costs ........................................................................... 14 6( f) Reasons for Change in Burden....................................................................................... 15 6( g) Burden Statement .......................................................................................................... 15 1 1. IDENTIFICATION OF THE INFORMATION COLLECTION 1( a) Title of the Information Collection This ICR is entitled " Reporting and Recordkeeping Requirements under the Perfluorocompound ( PFC) Reduction/ Climate Partnership for the Semiconductor Industry," EPA ICR number 1823.03.

1( b) Short Characterization In April 1993, President Clinton issued the Climate Change Action Plan ( CCAP), which established the Nation= s commitment to return U. S. greenhouse gas emissions to their 1990 levels by the year 2000. EPA= s PFC Reduction/ Climate Partnership for the Semiconductor Industry is an important program contributing to the overall reduction in greenhouse gas emissions from projected 2010 levels. The semiconductor industry partnership, along with EPA= s ENERGY STARJ programs and the Voluntary Aluminum Industrial Partnership( VAIP) are voluntary initiatives seeking to reduce greenhouse gas emissions using a pollution prevention approach.

The PFC Reduction/ Climate Partnership for the Semiconductor Industry is a voluntary program that promotes reduction of perfluorocompound ( PFC) 1 emissions, e. g., perfluoromethane ( CF4), perfluoroethane ( C2F6), sulfur hexafluoride ( SF6), nitrogen trifluoride ( NF3), and perfluoropropane ( C3F8), from semiconductor manufacturing. ( A single hydrofluorocarbon, trifluoromethane ( CHF3 ) is included in the program with the PFCs due to its high global warming potential.) EPA= s semiconductor industry partners have committed to reduce their PFC emissions 10 percent below their 1995 baseline level. As a partner to the industry, EPA serves as a clearinghouse of technical information on successful strategies for reducing PFC emissions that are economically, technically, and environmentally sound. EPA also helps assess the global warming potential of potential substitute chemicals and publicly recognizes the partner companies= achievements.

1 PFCs are the most potent greenhouse gases known. In comparison to an equivalent amount of the common greenhouse gas carbon dioxide, PFCs are 6,000  24,000 times more potent. Also, the atmospheric lifetimes of the PFCs range from 2,600 to 50,000 years. 2 Participation in the program begins with completion of a Memorandum of Understanding ( MOU) that outlines responsibilities of the PFC Reduction/ Climate Partnership. This MOU reflects a voluntary agreement between a semiconductor manufacturer ( the APartner Company@) and EPA ( collectively, the AParties@). By joining the Partnership, a Company agrees to submit a Company specific annual report, identifying an overall estimate of PFC emissions by gas, to a third party designated by the participating Companies. The MOU also specifies that the Partner Company will direct the designated third party to create a confidential data depository for the information supplied by the Partner Company. In addition, the MOU states that the Partner Company will direct the designated third party to prepare an industry wide annual report, to be submitted to EPA, that aggregates PFC emissions estimates, and provides each Partner Company= s annual emissions by gas on a Ablind@ or anonymous basis. The Partner Company also agrees that it will share with the EPA and others in the semiconductor industry information about successful PFC emission reduction processes and technologies that the Partner Company considers nonconfidential. This agreement applies only to PFC emissions originating from U. S. semiconductor manufacturing sites and can be terminated by either Party 30 days after the receipt of written notice by the other Party with no penalties or continuing obligations.

2. NEED FOR AND USE OF THE INFORMATION COLLECTION 2( a) Need and Authority for the Collection President Bush launched the Climate VISION initiative in February 2003 as part of his plan to reduce the national greenhouse gas intensity ( the amount of greenhouse gases emitted per dollar of GDP) by 18 percent over 10 years. EPA= s semiconductor industry partners are contributing to the Climate VISION= s efforts to reduce U. S. greenhouse gas emissions by striving to reduce their absolute PFC emissions 10 percent below their 1995 baseline level ( see www. climatevision. gov/ sectors/ semiconductors). The PFC Emission Reduction Partnership also supports EPA= s pollution prevention goals. Authority for collection of this information is provided in Sections 7403( a)( 1), ( b)( 6), and ( g)( 1) [ Clean Air Act ' 103].

EPA has developed this ICR to obtain authorization to collect information from Companies participating in the PFC Reduction/ Climate Partnership for the Semiconductor Industry. By participating in the program, a Partner Company agrees to the terms of various information collections specified by EPA in the Memorandum of Understanding ( MOU). The Partner Company submits the MOU to EPA. In addition, the Partner Company should submit to a designated third party a Company specific annual report that includes an overall estimate of the Partner Company= s PFC emissions by gas type.

An industry designated third party aggregates information on Company specific PFC emissions into an industry wide annual report, and combined with information on Partner Companies= PFC emissions ( submitted on a blind basis), EPA is able to evaluate the overall PFC 3 emission reductions achieved by the voluntary program. The MOU= s information sharing provision allows EPA to collect and share information about successful PFC emission reduction processes and technologies that Partner Companies consider nonconfidential.

2( b) Practical Utility and Users of the Data The Agency has used the MOU to establish a framework for a voluntary agreement with Companies in the Partnership. EPA will use information submitted in the industry wide annual reports to demonstrate that Partner Companies are reducing PFC emissions from semiconductor manufacturing operations. EPA also will use the information on an annual basis to develop the Inventory of U. S. Greenhouse Gas Emissions and Sinks. The U. S. government committed to developing and maintaining the Inventory under the United Nations Framework Convention on Climate Change ( UNFCCC). In addition, EPA will use the information collected to evaluate the quantity of emissions prevented and to publicize Company and Partnership successes. EPA may also use aggregated data to disseminate information concerning the Partnership. It is expected that the industry will employ this information to understand the extent and rate of growth of its PFC emissions in the U. S. To further this process, information sharing provided by Partner Companies will be used by EPA to publicize new processes or technologies that reduce emissions, and by the Partner Companies themselves to improve their environmental performance.

2( c) Assessment of Partnership= s Achievements In 2001, OMB requested EPA to evaluate the extent to which the Partner Companies would have reduced their PFC emissions in the absence of the Partnership. EPA constructed a top down vintage model to better understand the industry= s diverse and dynamic manufacturing technologies and estimate the U. S. industry= s Abusiness as usual@ ( BAU) PFC emissions.

When estimating air emissions from any source, it is customary practice to express the emissions as a product of two factors: an emissions factor, expressed as emissions per unit of activity and an activity factor, expressed in this case as a quantity of silicon consumed during semiconductor manufacture. EPA= s PFC Emissions Vintage Model ( PEVM) derives its PFC emissions factor from the Partners= annual reports and U. S. silicon consumption is derived from reports and projections provided by VLSI Research ( www. vlsiresearch. com).

Figure 1 near the end of this document depicts the Partners= actual PFC emissions through 2003 as compared to expected BAU emissions. Figure 1 also presents the estimated reduction of the partners= BAU emissions attributable to the advent and adoption of copper interconnects. A full description of EPA= s PEVM used to estimate BAU emissions with and without copper interconnects is available at www. epa. gov/ semiconductor pfc/ resources. html.

Copper interconnect technology evolved since the inception of the partnership in 1996 and was designed primarily to enable faster and smaller products. The smaller less resistive 4 interconnects have also delivered the added benefit of reducing the number of PFC emitting process steps. EPA has determined that the copper interconnect is the only new manufacturing technology developed to date without the Partnership's influence that reduces the semiconductor industry= s PFC emissions intensity.

The Partner Companies have identified and are implementing several other new manufacturing technologies and process improvements aimed at significantly improving their environmental performance. In response to EPA's voluntary initiative, the Partner Companies and their material suppliers have developed new production technologies including:

$ remote NF3 plasma cleaning for chemical vapor deposition ( CVD) chambers,

$ process optimizations,

$ alternative chemicals, and $ advanced PFC emissions abatement devices.

Remote NF3 chamber cleaning reduces PFC emissions by greater than 99 percent as compared to the traditional C 2 F 6 cleaning process. This technology is now found on all new CVD equipment sold in the U. S. and is being retrofitted to existing equipment by some Partner Companies.

In addition, Partner Companies have revisited their established manufacturing processes and successfully adjusted their production process Arecipes@ ( i. e., parameters such as the PFC gas flow rates, plasma power, and pressure) to reduce PFC use. The Partners have also improved the equipment= s ability to detect the process endpoint and thus ensure PFC gas flow delivery only when necessary. These types of process optimizations have reduced PFC emissions and in some cases improved throughput thereby delivering the added benefit of increased productivity.

EPA= s Semiconductor Partnership and its aggressive PFC emission reduction goal have sent a clear message to the industry= s equipment and chemical suppliers. The industry= s suppliers are responding by designing new chemicals with lower global warming impact and improved abatement devices that can neutralize PFC emissions before being exhausted to the atmosphere. For example, prior to the Partnership, the industry= s abatement devices were designed to control regulated criteria pollutants but these devices would not destroy the very stable and non reactive PFC gases. Today, equipment suppliers offer a menu of abatement options capable of controlling regulated pollutants and PFC emissions in one device. Many Partner Companies are choosing to upgrade their abatement systems to address PFC emissions and most new fabrication facilities are completely outfitted with the cleaner advanced technologies.

3. NONDUPLICATION, CONSULTATIONS, AND OTHER COLLECTION CRITERIA 5 3( a) Nonduplication The information to be obtained under this ICR is not collected by any other EPA program or Federal agency. The PFCs are not currently regulated chemicals, and the emissions of the gases are not tracked elsewhere. No databases are otherwise available for obtaining this information.

3( b) Public Notice Request Prior to ICR Submission to OMB In compliance with the Paperwork Reduction Act of 1995, EPA issued a public notice in the Federal Register [ August 23, 2004 Vol. 69, Number 162, Page 51831 51832] soliciting public comments for a 60 day period ending October 22, 2004. EPA received no public comments on the ICR during the comment period.

3( c) Consultations In the fall of 2000, EPA consulted with eight Companies in the PFC Reduction/ Climate Partnership to obtain feedback on the burdens and costs associated with the Partnership= s paperwork activities. EPA tried to ensure that the Partner Companies contacted were representative of Companies across the Partnership. After collecting their feedback, EPA developed an average burden and cost estimate for each respondent activity in this ICR and incorporated these estimates into the ICR= s burden and cost calculations. The Partnership= s composition and responsibilities have not changed significantly since 2000. Therefore, EPA has not adjusted the burden estimates for the partnership= s activities. EPA has adjusted the compensation level for the labor categories using Department of Labor statistics. See Section 6 of this ICR for these calculations.

EPA consulted with the following Partner Companies:

NAME OF CONTACT NAME OF ORGANIZATION PHONE NUMBER Jim Jewett Intel ( 480) 554 3621 Joe Mauser Philips ( 505) 822 7634 Coleen Miller & Tina Gilliland Texas Instruments ( 512) 356 7430 Mishelle Noble Dominion Semiconductor ( 703) 396 1120 6 Jamie Rubin Agilent Technologies ( 970) 288 4880 David Sovie Eastman Kodak ( 716) 722 9124 Tom Tamayo International Business Machines ( 802) 769 4950 Diane Van Schoten Advanced Micro Devices ( 408) 749 2045 3( d) Effects of Less Frequent Collection EPA requests that the Partner Company submit information on its PFC emissions to the designated third party once per year. The designated third party will submit an industry wide annual report to EPA once per year. EPA believes that any reduction in the frequency of this information collection would impede efforts by EPA to evaluate results of this program. In particular, if information were submitted less than once per year, emission inventories of greenhouse gases prepared by the government on an annual basis would suffer because the information used in such inventories would be dated. A less frequent collection would not enable EPA to track annual greenhouse gas emission reductions for the Climate VISION initiative or to submit an accurate assessment to the UNFCCC.

3( e) General Guidelines This ICR adheres to the guidelines stated in the Paperwork Reduction Act of 1995, OMB's implementing regulations, OMB's Information Collection Review Handbook, and other applicable OMB guidance.

3( f) Confidentiality No confidential information will be submitted to EPA at any point in the information collection process. Information submitted to EPA in the industry wide annual report will be either aggregated or provided on a Ablind@ basis. Further, data will be released by the designated third party only if a sufficient number of semiconductor companies participate in the Partnership so that aggregated emissions data cannot be correlated back to an individual Partner Company or a small group of Partner Companies. In addition, other information regarding successful PFC reduction strategies shared with EPA by the Partner Companies is nonconfidential. 7 3( g) Sensitive Questions No questions of a sensitive nature or of matters usually considered private to individuals will be asked.

4. THE RESPONDENTS AND THE INFORMATION REQUESTED 4( a) Respondents/ SIC and NAICS Codes The following is the Standard Industrial Classification ( SIC) code and the corresponding North American Industry Classification System ( NAICS) code associated with industries most likely to be affected by the information collection requirements covered under this ICR: SIC NAICS 3674 Semiconductor and Related Device Manufacturing 334413 These SIC and NAICS codes refer to the industry respondents for the Partnership. These SIC and NAICS codes are applicable because the Companies in the Partnership are semiconductor manufacturing companies.

4( b) Information Requested Companies participating in the PFC Reduction/ Climate Partnership submit a Memorandum of Understanding ( MOU) to the EPA. The Partner Companies also agree to submit to the designated third party a Company specific annual report that provides an overall estimate of PFC emissions by individual gas type. The designated third party will submit to EPA an industry wide annual report that provides an aggregated estimate of PFC emissions. EPA may review Company specific annual reports on the premises of the designated third party, after the third party has removed Company identifying information. In addition, by signing the MOU, Partner Companies agree to share information about successful PFC emission reduction processes with the EPA and others in the semiconductor industry. Each of these information collections is described separately below, along with the respective data items and respondent activities.

Memorandum of Understanding A number of Partner Companies worked with EPA to prepare the MOU establishing the terms of participation in the PFC Reduction/ Climate Partnership. After reviewing the MOU, each Company must sign and submit it to the Agency. There are currently 24 semiconductor manufacturers representing 80 percent of the U. S. industry participating in the partnership. All 24 companies have already reviewed and signed MOUs with EPA. EPA is not actively recruiting new partners so the MOU activities and associated burden estimates have been removed from this ICR renewal. 8 Company specific Annual Report The Partner Company agrees that it will prepare a Company specific annual report to be submitted to the designated third party. The partners agree to report an estimate of PFC emissions by specific gas type ( e. g., perfluoromethane ( CF4), perfluoroethane ( C2F6), sulfur hexafluoride ( SF6), nitrogen trifluoride ( NF3), trifluoromethane ( CHF3), and perfluoropropane ( C3F8)). The partner= s report may also include a written explanation of the methodology used to generate such estimates. The Partner Company must submit its Company specific annual PFC emissions report to the designated third party by April 15 of each year for the previous year. Because emissions estimates have potential competitive significance, they will be maintained on a Company specific confidential basis.

( i) Data items The Company specific annual report must include the following information:

The Partner Company name, name of a designated Partner Company representative, contact phone number, and fax number;

Reporting period;

Overall estimate of PFC emissions for all U. S. facilities operated by the Partner Company;

Description of methodology used for calculating PFC emissions estimate. The following is to be included for the methodology elements:

$ Description of how PFC usage was determined;

$ Description of source of emissions factors and how they were applied;

$ Description of how reductions due to abatement or other reduction techniques were accounted for; and $ An example calculation ( optional).

( ii) Respondent activity $ Partner Companies will complete and submit to the designated third party the Company specific annual report for each calendar year the MOU is in effect ( due April 15 of subsequent year).

Industry wide Annual Reports The designated third party is responsible for maintaining the Company specific annual reports and compiling them into an industry wide annual report. The designated third party will create a confidential data depository containing the annual reports supplied by the Partner Companies. The designated third party will provide to EPA an industry wide annual report. This 9 report will be in the form of a letter to EPA. Based on the Company specific annual reports, the designated third party will provide an aggregated, partnership report estimating PFC emissions by gas.

The third party will make available to EPA emissions estimates prepared by the Partner Companies and the written explanation of the methodology used. This information will be reviewed by EPA on the designated third party= s premises. The designated third party will remove Company identifying information from such documents before they are reviewed by EPA.

( i) Data items The confidential data depository will include the following information:

The Partner Company name, name of a designated Partner Company representative, contact phone number, and fax number;

Reporting period;

Overall estimate of PFC emissions for all U. S. facilities operated by the Partner Company,

Description of methodology used for calculating PFC emissions estimates.

The industry wide annual report prepared by the designated third party will include the following information:

Reporting period;

Total number of participating semiconductor manufacturers; and

Total PFC emissions estimate for the semiconductor industry partnership.

( ii) Respondent activities In developing and submitting this information, the designated third party will perform the following activities:

Develop and update confidential data depository;

Receive Company specific annual reports and enter into confidential data depository;

Complete and submit to EPA the industry wide annual report containing an aggregated PFC emissions estimate;

File and maintain copies of annual reports; and

Make emissions estimates and written explanations of the methodology prepared by Partner Companies available to EPA for review.

Information Sharing 10 Each Partner Company agrees that it will share with EPA and others in the semiconductor industry information about successful PFC emission reduction processes and technologies that the Partner Company considers nonconfidential.

( i) Data item

Documentation describing applicable PFC reduction processes and technologies.

( ii) Respondent activity

The Partner Companies will share information about successful PFC emission reduction processes and technologies by submitting this information to EPA.

5. THE INFORMATION COLLECTED AGENCY ACTIVITIES, COLLECTION METHODOLOGY, AND INFORMATION MANAGEMENT 5( a) Agency Activities The Partnership requires EPA to perform certain activities associated with the Companyspecific Annual Report, the Industry wide Annual Report, and the Information Sharing. Each of these three ongoing information collections, and the Agency= s activities associated with them, are described in more detail below.

Memorandum of Understanding EPA developed an MOU in cooperation its industry partners and has signed agreements with the majority of the U. S. industry. EPA does not expect to take any further actions related to the partnership= s MOU.

Company specific Annual Reports EPA will perform the following activities with regard to the Company specific annual report submitted by the Partner Company to the designated third party:

Review Company specific annual reports on the premises of the designated third party, on a blind basis.

Industry wide Annual Reports 11 EPA will perform the following activities with regard to the industry wide annual report submitted by the designated third party to EPA:

Receive and review the industry wide annual report; and

File and maintain copies of the report.

Information Sharing EPA will perform the following activities with respect to information sharing with the Partner Company and the public:

Establish and maintain clearinghouse of technical information on successful strategies for reducing PFC emissions; and

Provide public recognition of Partner Companies= achievements in reducing PFC emissions and for their public service in protecting the environment.

5( b) Collection Methodology and Management In collecting and analyzing the information associated with this ICR, EPA uses electronic equipment such as personal computers and applicable database software. EPA will ensure the accuracy and completeness of collected information by reviewing each Partner Company= s submitted information. EPA will maintain files of MOUs and other reports. Public access to the overall annual emission estimate will be possible through EPA= s partnership Internet web site ( www. epa. gov/ semiconductor pfc), annual CCAP reporting, EPA= s annual Inventory of U. S. Greenhouse Gas Emissions and Sinks, and informational materials EPA will prepare to publicize the successes of the Partnership.

5( c) Small Entity Flexibility EPA has designed its report forms to minimize respondent burden while obtaining sufficient and accurate information. In addition, the burden associated with the Partnership is inherently minimized since the initial agreement to participate is voluntary.

5( d) Collection Schedule EPA collects information in the MOU, which is completed and submitted by the Partner Company. EPA will receive the Partnership= s emissions report from the designated third party on an annual basis. EPA may collect other program information on a periodic basis or as the information is submitted. 12 6. ESTIMATING THE BURDEN AND COST OF THE COLLECTION 6( a) Estimating Respondent Burden Exhibit 1 presents the estimated annual respondent burden and costs for information collection activities associated with the PFC Reduction/ Climate Partnership for the Semiconductor Industry. The exhibit includes the number of hours required to conduct the information collection activity and the cost associated with each requirement. In developing burden estimates for each information collection requirement in this ICR, EPA consulted with current Partner Companies. ( See Section 3( c) of this ICR for information on the consultations.) As shown in Exhibit 1, EPA estimates a total average annual respondent burden of approximately 13,266 hours. Assumptions used in calculating this estimate are described below.

6( b) Estimating Respondent Costs Labor Costs EPA estimates respondent labor costs ( hourly rate plus overhead and fringe) based on the average hourly labor rates of the Partner Companies= and designated third party= s employees, as applicable. For the Partner Companies, EPA estimates average hourly labor rates of $ 107.10 for legal staff, $ 94.21 for managerial staff, $ 73.85 for technical staff, and $ 33.02 for clerical staff. These labor rates are based on consultations with eight Partner Companies and adjusted for growth in employee compensation from 2001 to first quarter of 20042. Table 1 summarizes the labor rates.

Table 1: Average Hourly Respondent Labor Rates Type of Respondent Legal Managerial Technical Clerical Partner Companies $ 107.10 $ 94.21 $ 73.85 $ 33.02 Capital and Operation and Maintenance ( O& M) Costs The Companies participating in the Partnership are not required to incur any notable capital costs under the Partnership ( i. e., for analytical equipment used to develop PFC emissions factors). The Partner Companies= equipment suppliers normally provide emissions readings to 2U. S. employee compensation costs grew by 19 percent from 2001 to Q1 2004. U. S. Department of Labor, Bureau of Labor Statistics: www. bls. gov, 2004. 13 them as a standard business practice. In addition, emissions factors tables are available to the industry through the Intergovernmental Panel on Climate Change.

Companies participating in the Partnership may incur annual operation and maintenance ( O& M) costs. Partner Companies may incur O& M costs by continuing to develop and operate gas tracking programs, operating and maintaining analytical equipment to allow for continued analysis of emissions, and submitting information to EPA ( based on postage costs of $ 3.00 per mailing). Partner Companies also may incur O& M costs associated with travel to meetings as a part of their sharing of information.

6( c) Estimating Agency Burden and Cost Exhibit 2 presents the estimated Agency burden hours and costs associated with the information collection activities for this ICR. Agency labor costs are based on the 2004 GS pay schedule multiplied by 1.6 to estimate total salary plus benefits. EPA estimates an average hourly labor cost of $ 67.04 for legal staff ( GS 15), $ 56.99 for managerial staff ( GS 14), $ 48.22 for technical staff ( GS 13), and $ 22.86 ( GS 7) for clerical staff. As shown in Exhibit 2, EPA estimates that the annual Agency burden for all activities covered in this ICR is 227 hours at a total cost of $ 11,815.

6( d) Estimating the Respondent Universe and Total Respondent Burden and Costs Respondent Universe EPA expects the current 24 Partner Companies to maintain their active participation for the three year effective life of this ICR renewal. The following paragraphs discuss the information collections these Partner Companies will perform under the Partnership. Exhibit 1 calculates the annual burden and cost to Partner Companies in performing these collections.

Company Specific Annual Report Each Partner Company agrees to prepare a Company specific annual report to be submitted to the designated third party. The report will provide an estimate of the company= s PFC emissions by gas for the previous calendar year. Most of EPA= s current Partner Companies have participated and prepared annual reports since 1999. As shown in Exhibit 1, EPA estimates that Partner Companies will require 290.5 hours to prepare and submit the annual reports to the designated third party. 14 Industry wide Annual Report The designated third party will be responsible for receiving and tracking the Companyspecific annual reports and compiling them into an industry wide annual report. The designated third party will create and update a confidential data depository containing the annual reports supplied by the Partner Companies. The designated third party will provide to EPA an industrywide annual report. Based on the Company specific annual reports, the designated third party will provide an aggregated, overall PFC emissions estimate.

In addition, the designated third party will make available to EPA emissions estimates prepared by the Partner Companies and the written explanation of the methodology used. This information also will be maintained on site by the designated third party and reviewed by EPA on the designated third party= s premises. These activities are reflected in Exhibit 1.

Information Sharing The Companies participating in the Partnership agree to share with EPA information about successful PFC emission reduction processes and technologies that the Partner Companies consider nonconfidential, and will share such nonconfidential information with others in the semiconductor industry. Partner Companies may incur burden and costs for attending meetings ( including travel and lodging costs), participating in teleconferences with EPA and industry, and other outreach efforts. EPA estimates the all 24 Partner Companies will share information each year. The Partners= expected activities are reflected in Exhibit 1.

6( e) Bottom Line Burden Hours and Costs Respondent Tally In Exhibit 1, EPA estimates the total annual respondent burden and cost for the PFC Emission Reduction Partnership to be approximately 13,050 hours and $ 1,253,982. The bottom line respondent burden over the three year period covered by this ICR is approximately 39,150 hours, at a total cost of approximately $ 3,761,946. The total annual capital and O& M costs for the partnership are estimated to be $ 132,936 per year.

Agency Tally As shown in Exhibit 2, the annual Agency burden and cost are estimated to be approximately 227 hours and $ 11,815 per year. The bottom line Agency burden over the three year period covered by this ICR is approximately 681 hours, at a total cost of approximately $ 35,445. 15 Variations in the Annual Bottom Line EPA anticipates no significant variation in the annual respondent reporting and/ or recordkeeping burden over the next three years.

6( f) Reasons for Change in Burden The number of burden hours has changed from the previous ICR because no new partners are expected to review and sign MOUs with EPA. The number of Companies in the Partnership is expected to remain stable at 24. This ICR has removed burden hours associated with the MOU activities.

6( g) Burden Statement The annual public reporting burden for this collection of information is estimated to average 542 hours per Partner Company. There is no recordkeeping burden for Partners. The annual reporting burden is estimated to be about eight hours for the designated third party. This burden includes time for preparing and submitting the industry wide annual report and making emissions data available to EPA. The annual recordkeeping burden to the designated third party is estimated to be about 46 hours. This burden includes time for updating and maintaining the data depository, receiving and entering Company specific reports into the depository, and filing and maintaining copies of Company specific annual reports. Burden means the total time, effort, or financial resources expended by persons to generate, maintain, retain, or disclose or provide information to or for a Federal agency. This includes the time needed to review instructions; develop, acquire, install, and utilize technology and systems for the purposes of collecting, validating, and verifying information, processing and maintaining information, and disclosing and providing information; adjust the existing ways to comply with any previously applicable instructions and requirements; train personnel to be able to respond to a collection of information; search data sources; complete and review the collection of information; and transmit or otherwise disclose the information. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number. The OMB control numbers for EPA's regulations are listed in 40 CFR part 9 and 48 CFR chapter 15.

To comment on the Agency's need for this information, the accuracy of the provided burden estimates, and any suggested methods for minimizing respondent burden, including the use of automated collection techniques, EPA has established a public docket for this ICR under Docket ID No. OAR 2004 0228, which is available for public viewing at the Air and Radiation Docket in the EPA Docket Center ( EPA/ DC), EPA West, Room B102, 1301 Constitution Ave., NW, Washington, DC. The EPA Docket Center Public Reading Room is open from 8: 30 a. m. to 4: 30 p. m., Monday through Friday, excluding legal holidays. The telephone number for the Reading Room is ( 202) 566 1744, and the telephone number for the Air and Radiation Docket is 16 ( 202) 566 2426. An electronic version of the public docket is available through EPA Dockets ( EDOCKET) at http:// www. epa. gov/ edocket. Use EDOCKET to submit or view public comments, access the index listing of the contents of the public docket, and to access those documents in the public docket that are available electronically. Once in the system, select Asearch,@ then key in the docket ID number identified above. Also, you can send comments to the Office of Information and Regulatory Affairs, Office of Management and Budget, 725 17th Street, NW, Washington, DC 20503, Attention: Desk Office for EPA. Please include the EPA Docket ID No. OAR 2004 0228 and OMB control number 2060 0382 in any correspondence. 17 Figure 1. U. S. Partner Companies= PFC emission with and without EPA Partnership.

Semiconductor Partnership Accomplishments vs.

Business As Usual ( BAU)

0 0.5 1 1.5 2 2.5 3 Year PFC Emissions (

MMTCE) BAU BAU with Cu Actual Emissions 18


[Federal Register Volume 87, Number 214 (Monday, November 7, 2022)]
[Notices]
[Pages 67091-67098]
[FR Doc No: 2022-24142]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-96197; File No. SR-Phlx-2022-41]

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

November 1, 2022.
    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 October 17, 2022, Nasdaq PHLX LLC (``Phlx'' or ``Exchange'') filed
with the Securities and Exchange Commission (``SEC'' or ``Commission'')
the proposed rule change as described in Items I, II, and III, below,
which Items have been prepared by the Exchange. The Commission is
publishing this notice to solicit comments on the proposed rule change
from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange proposes to amend Phlx's Pricing Schedule at Options
7.\3\
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    \3\ The Exchange initially filed the proposed pricing changes on
October 3, 2022 as SR-Phlx-2022-40. The instant filing replaced SR-
Phlx-2022-40 which was withdrawn on October 17, 2022.
---------------------------------------------------------------------------

    The text of the proposed rule change is available on the Exchange's
website at https://listingcenter.nasdaq.com/rulebook/phlx/rules, 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 to amend its Pricing Schedule at Options 7.
Specifically, Phlx proposes to amend: (1) Options 7, Section 3, Rebates
and Fees for Adding and Removing Liquidity in SPY, with respect to its
pricing for Price Improvement XL (``PIXL'') executions in SPY; (2)
Options 7, Section 4, Multiply Listed Options Fees (Includes options
overlying equities, ETFs, ETNs and indexes which are Multiply Listed)
(Excludes SPY and broad-based index options symbols listed within
Options 7, Section 5.A), with respect to its Qualified Contingent Cross
(``QCC'') Rebates and Monthly Firm Fee Cap; and (3) Options 7, Section
6, Other Transaction Fees, with respect to PIXL pricing other than
options in SPY. Each change will be described below.
Options 7, Section 3
    The Exchange proposes to amend Options 7, Section 3, Rebates and
Fees for Adding and Removing Liquidity in SPY, with respect to its PIXL
executions in SPY. Today, SPY PIXL Initiating Orders \4\ are assessed a
$0.05 per contract fee, however, members or member organizations that
qualify for Options 7, Section 2, Customer \5\ Rebate Tiers 2 through 6
or qualify for the Monthly Firm Fee Cap \6\ are eligible for a rebate
of $0.12 per contract for all SPY Complex PIXL Orders greater than 499
contracts, provided the member or member organization executes an
average of 2,500 contracts per day of SPY Complex PIXL Orders in a
month.\7\ The Exchange separately assesses fees for PIXL Orders contra
the Initiating Order \8\ which are not being amended at this time.
---------------------------------------------------------------------------

    \4\ An order entered into a PIXL Auction mechanism shall be
comprised of two orders, a PIXL agency order and a contra-side
Initiating Order. See Options 3, Section 13.
    \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 (``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 Options 1, Section
1(b)(45)). See Options 7, Section 1(c).
    \6\ Today, Firms are subject to a Monthly Firm Fee Cap of
$75,000. See Options 7, Section 4.
    \7\ A member may electronically submit for execution an order it
represents as agent on behalf of a public customer, broker-dealer,
or any other entity (``PIXL Order'') against principal interest or
against any other order (except as provided in Options 3, Section
13(a)(6)) it represents as agent (``Initiating Order'') provided it
submits the PIXL order for electronic execution into the PIXL
Auction (``Auction'') pursuant to Options 3, Section 13.
    \8\ When the PIXL Order is contra to the Initiating Order, a
Customer PIXL Order is assessed $0.00 per contract and all other
Non-Customer market participants are assessed a $0.38 per contract
fee when contra to an Initiating Order. Further, when the PIXL Order
is contra to other than the Initiating Order, the PIXL Order is
assessed $0.00 per contract, unless the PIXL Order is a Customer, in
which case the Customer receives a rebate of $0.40 per contract.
Finally, all other Non-Customer contra parties to the PIXL Order
that are not the Initiating Order are assessed a Fee for Removing
Liquidity of $0.50 per contract or are entitled to receive the
Rebate for Adding Liquidity. When the PIXL Order is contra to a Lead
Market Maker or Market Maker quote, which was established at the
initiation of a PIXL auction, the Customer PIXL Order is not be
eligible for a rebate. See Options 7, Section 3.
---------------------------------------------------------------------------

    At this time, the Exchange proposes to continue to assess SPY PIXL
Initiating Orders a $0.05 per contract fee. Members or member
organizations that qualify for Options 7, Section 2, Customer Rebate
Tiers 2 through 6 or qualify for the Monthly Firm Fee Cap will continue
to be eligible for a rebate of $0.12 per contract for all SPY Complex
PIXL Orders greater than 499 contracts when contra to an Initiating
Order, provided the member or member organization executes an average
of 2,500 contracts per day of SPY Complex PIXL Orders in a month. The
Exchange's proposal to further qualify that the SPY Complex PIXL Orders
greater than 499 contracts must be contra to an Initiating Order, in
addition to the member or member organization having executed an
average of 2,500 contracts per day of SPY Complex PIXL Orders in a
month. As is the case today, when the PIXL Order is contra to other
than the Initiating Order, the PIXL Order is assessed $0.00 per
contract, unless the PIXL Order is a Customer, in which case the
Customer receives a rebate of $0.40 per contract.
    Below is an example of the proposed change which presumes the
market participant has met the qualifications for the rebate.

    Assume:

NBBO and PHLX are both $1.00 x $1.50
Initiator sends PIXL Complex Order in SPY to buy 500 spreads (1000
contracts) for $1.45 (Market Maker not assigned in SPY is contra-side)
Instance 1
    When no outside response to interact with the PIXL order--no change
from Sep to Oct in pricing.
Oct 3 Pricing
Public Customer fee to execute PIXL Complex Order = $0.00 per contract
Initiating Order fee = $0.05 fee--$50.00
PIXL Order rebate = $0.12 per contract ($120.00)

    The rebate is achieved because the PIXL Order trades against the
Initiating Order in its entirety.
Instance 2
    Assume:

Responders to the PIXL Complex Order indicate the following allocation
process:
Initiating Order = 40% (400 contracts)
Auction Responders = 60% (600 contracts)
Sept Pricing
Public Customer fee to execute PIXL Complex Order = $0.00
(paired) = $0.05 fee--$20.00 ($0.05 x 400 contracts)
Responder fee = $0.50 per contract--$300.00
Break-Up rebate = ($0.40) per contract ($240.00)
PIXL Order rebate = $0.12 per contract ($120.00)
Oct 3 Pricing
Public Customer Charge to execute PIXL Complex Order = $0.00
Initiating Order (paired) = $0.05 fee--$20.00 ($0.05 x 400 contracts)
Responder fee = $0.50 per contract--$300.00
Break-Up rebate = ($0.40) per contract ($240.00)
Additional PIXL Order rebate = ($0.12) per contract ($48.00) ($0.12 x
400 contracts contra PIXL order)

    With this change the rebate would be paid only to PIXL Complex
Order contracts that were executed against the Initiating Order. The
prior pricing rebate was for $120 (1000 contracts x $0.12) and the
October pricing would be $48 (400 contracts x $0.12).
    The Exchange desires to continue to incentivize members and member
organizations to transact a greater number of SPY Complex PIXL Orders
while also incentivizing members and member organizations to submit
Customer order flow on Phlx. While the proposal no longer offers the
$0.12 per contract rebate that is available today for the PIXL Agency
Order when that PIXL Order is contra to other than the Initiating
Order, the Exchange believes that market participants will continue to
be incentivized to submit PIXL Agency Orders to Phlx because the
Exchange continues to offer a rebate of $0.40 per contract when the
PIXL Order is contra to other than the Initiating Order.
Options 7, Section 4
QCC
    The Exchange proposes to amend Options 7, Section 4, Multiply
Listed Options Fees (Includes options overlying equities, ETFs, ETNs
and indexes which are Multiply Listed) (Excludes SPY and broad-based
index options symbols listed within Options 7, Section 5.A) with
respect to its QCC Rebates.
    Today, the Exchange assesses a $0.20 per contract QCC Transaction
Fees \9\ to a Lead Market Maker,\10\ Market Maker,\11\ Firm \12\ and
Broker-Dealer.\13\ Customers and Professionals \14\ are not assessed a
QCC Transaction Fee. QCC Transaction Fees apply to electronic QCC
Orders \15\ and Floor QCC Orders.\16\ Rebates are paid on all
qualifying executed electronic QCC Orders and Floor QCC Orders based on
the following six tier rebate schedule:\17\
---------------------------------------------------------------------------

    \9\ QCC Transaction Fees apply to electronic QCC Orders, as
defined in Options 3, Section 12, and Floor QCC Orders, as defined
in Options 8, Section 30(e).
    \10\ The term ``Lead Market Maker'' applies to transactions for
the account of a Lead Market Maker (as defined in Options 2, Section
12(a)). A Lead Market Maker is an Exchange member who is registered
as an options Lead Market Maker pursuant to Options 2, Section
12(a). An options Lead Market Maker includes a Remote Lead Market
Maker which is defined as an options Lead Market Maker in one or
more classes that does not have a physical presence on an Exchange
floor and is approved by the Exchange pursuant to Options 2, Section
11. See Options 7, Section 1(c). The term ``Floor Lead Market
Maker'' is a member who is registered as an options Lead Market
Maker pursuant to Options 2, Section 12(a) and has a physical
presence on the Exchange's trading floor. See Options 8, Section
2(a)(3).
    \11\ The term ``Market Maker'' is defined in Options 1, Section
1(b)(28) as a member of the Exchange who is registered as an options
Market Maker pursuant to Options 2, Section 12(a). A Market Maker
includes SQTs and RSQTs as well as Floor Market Makers. See Options
7, Section 1(c). The term ``Floor Market Maker'' is a Market Maker
who is neither an SQT or an RSQT. A Floor Market Maker may provide a
quote in open outcry. See Options 8, Section 2(a)(4).
    \12\ The term ``Firm'' applies to any transaction that is
identified by a member or member organization for clearing in the
Firm range at The Options Clearing Corporation. See Options 7,
Section 1(c).
    \13\ The term ``Broker-Dealer'' applies to any transaction which
is not subject to any of the other transaction fees applicable
within a particular category. See Options 7, Section 1(c).
    \14\ The term ``Professional'' applies to transactions for the
accounts of Professionals, as defined in Options 1, Section 1(b)(45)
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 Options 7, Section 1(c).
    \15\ Electronic QCC Orders are described in Options 3, Section
12.
    \16\ Floor QCC Orders are described in Options 8, Section 30(e).
    \17\ Volume resulting from all executed electronic QCC Orders
and Floor QCC Orders, including Customer-to-Customer, Customer-to-
Professional, and Professional-to-Professional transactions and
excluding dividend, merger, short stock interest or reversal or
conversion strategy executions, is aggregated in determining the
applicable volume tier.

                                               QCC Rebate Schedule
----------------------------------------------------------------------------------------------------------------
                 Tier                                        Threshold                       Rebate per contract
----------------------------------------------------------------------------------------------------------------
Tier 1................................  0 to 99,999 contracts in a month..................                 $0.00
Tier 2................................  100,000 to 299,999 contracts in a month...........                  0.05
Tier 3................................  300,000 to 499,999 contracts in a month...........                  0.07
Tier 4................................  500,000 to 699,999 contracts in a month...........                  0.08
Tier 5................................  700,000 to 999,999 contracts in a month...........                  0.09
Tier 6................................  Over 1,000,000 contracts in a month...............                  0.11
----------------------------------------------------------------------------------------------------------------

    The Exchange does not pay a QCC Rebate where the transaction is
either: (i) Customer-to-Customer; (ii) Customer-to-Professional; (iii)
Professional-to-Professional; or (iv) a dividend, merger, short stock
interest or reversal or conversion strategy execution (as defined in
Options 7, Section 4).

    At this time, the Exchange proposes to reduce the six tier rebate
schedule to a two tier schedule as follows:

                                               QCC Rebate Schedule
----------------------------------------------------------------------------------------------------------------
                 Tier                                        Threshold                       Rebate per contract
----------------------------------------------------------------------------------------------------------------
Tier 1................................  0 to 999,999 contracts in a month.................                 $0.09
Tier 2................................  1,000,000 contracts or more in a month............                  0.17
----------------------------------------------------------------------------------------------------------------

    The Exchange would pay a Tier 1 QCC Rebate of $0.09 per contract on
all qualifying executed electronic QCC Orders and Floor QCC Orders up
to 999,999 contracts in a month. The Exchange would pay a Tier 2 QCC
Rebate of $0.17 per contract on all qualifying executed electronic QCC
Orders and Floor QCC Orders of $1,000,000 contracts or more in a month.
With this change, the Exchange would pay a $0.09 per contract QCC
Rebate for each contract from the first execution up to 999,999
contracts in a month. Today, Members that execute 0 to 99,999 contracts
in a month do not receive a QCC Tier 1 Rebate. Additionally, while
today the Exchange pays a Tier 5 QCC Rebate of $0.09 per contract for
700,000 to 999,999 contracts in a month, with this proposal the
proposed $0.09 per contract Tier 1 QCC Rebate may be up to 999,999
contracts in a month. Also, while today, the Exchange pays a Tier 6 QCC
Rebate of $0.11 per contract for qualifying executed electronic QCC
Orders and Floor QCC Orders over $1,000,000 contracts in a month, the
proposed Tier 2 QCC Rebate would be increased to $0.17 per contract for
$1,000,000 contracts or more in a month.
    The Exchange believes that its proposal will incentivize members
and member organizations to submit a greater amount of QCC Orders to
Phlx in order to obtain a rebate.
Monthly Firm Fee Cap
    The Exchange proposes to amend Options 7, Section 4, Multiply
Listed Options Fees (Includes options overlying equities, ETFs, ETNs
and indexes which are Multiply Listed) (Excludes SPY and broad-based
index options symbols listed within Options 7, Section 5.A), with
respect to its Monthly Firm Fee Cap. Today, Firms are subject to a
maximum fee of $75,000 known as the ``Monthly Firm Fee Cap''. Firm
Floor Option Transaction Charges and QCC Transaction Fees, as defined
in Options 7, Section 4, 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. The following
pricing is excluded from the Monthly Firm Fee Cap: (1) all dividend,
merger, and short stock interest strategy executions, as defined in
Options 7, Section 4; (2) transactions in broad-based index options
symbols listed within Options 7, Section 5.A.; and (3) reversal and
conversion, jelly roll and box spread strategy executions as defined in
this Options 7, Section 4. QCC Transaction Fees are included in the
calculation of the Monthly Firm Fee Cap.\18\
---------------------------------------------------------------------------

    \18\ Member organizations are required to notify the Exchange in
writing of all accounts in which the member is not trading in its
own proprietary account.
---------------------------------------------------------------------------

    At this time, the Exchange proposes to amend the Monthly Firm Fee
Cap from $75,000 to $150,000. The Monthly Firm Fee Cap has remained at
$75,000 since 2010.\19\ The Exchange believes that while this cap is
being increased, Firms will continue to be incentivized by the cap.
---------------------------------------------------------------------------

    \19\ The Monthly Firm Fee Cap was previously called the Firm
Related Equity Option Cap. See Securities Exchange Act Release No.
65888 (December 5, 2011), 76 FR 77046 (December 9, 2011) (SR-Phlx-
2011-160).
---------------------------------------------------------------------------

Options 7, Section 6
    The Exchange proposes to amend Options 7, Section 6, Other
Transaction Fees, at A. PIXL Pricing with respect to PIXL pricing other
than options in SPY. Today, an Initiating Order in PIXL is assessed a
$0.07 per contract fee, with the exception of SPY PIXL Orders which are
assessed the pricing within Options 7, Section 4. Today, if the member
or member organization qualifies for the Tier 3, 4 or 5 Customer Rebate
in Options 7, Section 2 the member or member organization is assessed
$0.05 per contract. If the member or member organization executes equal
to or greater than 3.00% of National Customer Volume in Multiply-Listed
equity and ETF Options Classes (excluding SPY Options) in a given
month, the member or member organization is not assessed a fee for
Complex PIXL Orders. Any member or member organization under Common
Ownership with another member or member organization that qualifies for
a Customer Rebate Tier 4 or 5 in Options 7, Section 2, or executes
equal to or greater than 3.00% of National Customer Volume in Multiply-
Listed equity and ETF Options Classes (excluding SPY Options) in a
given month receives one of the PIXL Initiating Order discounts noted
herein. Finally, members or member organizations that qualify for
Customer Rebate Tiers 2 through 6 or qualify for the Monthly Firm Fee
Cap are eligible for a rebate of $0.12 per contract for all Complex
PIXL Orders (excluding SPY Options) greater than 499 contracts,
provided the member or member organization executes an average of 2,500
contracts per day of Complex PIXL Orders in a month.
    Similar to the change proposed for SPY PIXL within Options 7,
Section 3, the Exchange proposes to amend Options 7, 6A. to provide
that members or member organizations that qualify for Customer Rebate
Tiers 2 through 6 or qualify for the Monthly Firm Fee Cap are eligible
for a rebate of $0.12 per contract for all Complex PIXL Orders
(excluding SPY Options) greater than 499 contracts when contra to an
Initiating Order, provided the member executes an average of 2,500
contracts per day of Complex PIXL Orders in a month.
    Below is an example of the proposed change which presumes the
market participant has met the qualifications for the rebate.
    Assume for Options 7, Section 6A:

NBBO and PHLX are both $1.00 x $1.50
Initiator sends PIXL Complex Order in AAPL to buy 500 spreads (1000
contracts) for $1.45 (Market Maker not assigned in AAPL is contra-side)
PIXL Agency Order qualifies for Customer Rebate Tier 5
Instance 1
    When no outside response to interact with the PIXL order--no change
from Sep to Oct in pricing.
Oct 3 Pricing
Public Customer fee to execute PIXL Complex Order = $0.00 per contract
Initiating Order fee = $0.07 fee--$70.00
PIXL Order rebate = $0.12 per contract ($120.00)

    The rebate is achieved because the PIXL Complex Order trades
against the Initiating Order in its entirety.
Instance 2
    Assume:

Responders to the PIXL Complex Order indicate the following allocation
process:

Initiating Order = 40% (400 contracts)
Auction Responders = 60% (600 contracts)
PIXL Agency Order qualifies for Customer Rebate Tier 5
Sept Pricing
Public Customer fee to execute PIXL Complex Order = $0.00
(paired) = $0.07 fee--$28.00 ($0.07 x 400 contracts)
Market Maker Responder Penny Symbol fee = $0.25 per contract ($0.25 x
600 contracts)--$150.00
PIXL Order rebate = $0.12 per contract ($0.12 x 1000 = $120.00)
PIXL Agency Order qualifies for $0.22 per contract rebate ($132.00) for
Category C Customer Rebate which applies to PIXL Complex Orders ($0.22
x 600 contracts)
Oct 3 Pricing
Public Customer Charge to execute PIXL Complex Order = $0.00
Initiating Order (paired) = $0.07 fee--$28.00 ($0.07 x 400 contracts)
Market Maker Responder Penny Symbol fee = $0.25 per contract ($0.25 x
600 contracts)--$150.00
PIXL Order rebate = $0.12 per contract ($0.12 x 400 = $48.00)
PIXL Agency Order qualifies for $0.22 per contract rebate ($132.00) for
Category C Customer Rebate which applies to PIXL Complex Orders ($0.22
x 600 contracts)

    With this change the rebate would be paid only to PIXL Complex
Order contracts that were executed against the Initiating Order. The
prior pricing rebate was for $120 (1,000 contracts x $0.12) and the
October pricing would be $48 (400 contracts x $0.12).
    The Exchange desires to continue to incentivize members and member
organizations to transact a greater number of Complex PIXL Orders while
also incentivizing members and member organizations to submit Customer
order flow on Phlx. While the proposal no longer offers the $0.12 per
contract rebate that is available today for the PIXL Agency Order when
that PIXL Order is contra to other than the Initiating Order, the
Exchange believes that market participants will continue to be
incentivized to submit PIXL Agency Orders to Phlx because the Exchange
continues to offer Category C and D rebate for Complex Orders when the
PIXL Order is contra to other than the Initiating Order.\20\
---------------------------------------------------------------------------

    \20\ When a PIXL Order is contra to a PIXL Auction Responder, a
Customer PIXL Order will be assessed $0.00 per contract, other Non-
Customer PIXL Orders will be assessed $0.30 per contract in Penny
Symbols or $0.38 per contract in Non-Penny Symbols. A Responder that
is a Lead Market Maker or a Market Maker will be assessed $0.25 per
contract in Penny Symbols or $0.40 per contract in Non-Penny
Symbols. Other Non-Customer Responders will be assessed $0.48 per
contract in Penny Symbols or $0.70 per contract in Non-Penny Symbols
when contra to a PIXL Order. A Responder that is a Customer will be
assessed $0.00 per contract in Penny Symbols and Non-Penny Symbol.
When a PIXL Order is contra to a resting order or quote a Customer
PIXL Order will be assessed $0.00 per contract, other Non-Customer
will be assessed $0.30 per contract and the resting order or quote
will be assessed the appropriate Options Transaction Charge in
Options 7, Section 4.
---------------------------------------------------------------------------

Technical Amendments
    The Exchange proposes to add the terms ``member'' and member
organization,'' where applicable, within the proposed rule text.
Pursuant to General 1, Section 1(16), the term ``member'' means:

a permit holder which has not been terminated in accordance with the
By-Laws and these Rules of the Exchange. A member is a natural
person and must be a person associated with a member organization.
Any references in the rules of the Exchange to the rights or
obligations of an associated person or person associated with a
member organization also includes a member.

    Pursuant to General 1, Section 1(17) the term ``member
organization'' means:

a corporation, partnership (general or limited), limited liability
partnership, limited liability company, business trust or similar
organization, transacting business as a broker or a dealer in
securities and which has the status of a member organization by
virtue of (i) admission to membership given to it by the Membership
Department pursuant to the provisions of General 3, Sections 5 and
10 or the By-Laws or (ii) the transitional rules adopted by the
Exchange pursuant to Section 6-4 of the By-Laws. References herein
to officer or partner, when used in the context of a member
organization, shall include any person holding a similar position in
any organization other than a corporation or partnership that has
the status of a member organization.

    An entity may be either a member or member organization on Phlx and
therefore both terms apply when describing transaction fees and caps
applicable to entities that have been approved for membership on Phlx.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\21\ in general, and furthers the objectives of
Sections 6(b)(4) and 6(b)(5) of the Act,\22\ in particular, in that it
provides for the equitable allocation of reasonable dues, fees and
other charges among members and issuers and other persons using any
facility, and is not designed to permit unfair discrimination between
customers, issuers, brokers, or dealers.
---------------------------------------------------------------------------

    \21\ 15 U.S.C. 78f(b).
    \22\ 15 U.S.C. 78f(b)(4) and (5).
---------------------------------------------------------------------------

    The Commission and the courts have repeatedly expressed their
preference for competition over regulatory intervention in determining
prices, products, and services in the securities markets. In Regulation
NMS, while adopting a series of steps to improve the current market
model, the Commission highlighted the importance of market forces in
determining prices and SRO revenues and, also, recognized that current
regulation of the market system ``has been remarkably successful in
promoting market competition in its broader forms that are most
important to investors and listed companies.'' \23\
---------------------------------------------------------------------------

    \23\ Securities Exchange Act Release No. 51808 (June 9, 2005),
70 FR 37496, 37499 (June 29, 2005) (``Regulation NMS Adopting
Release'').
---------------------------------------------------------------------------

    Likewise, in NetCoalition v. Securities and Exchange Commission
\24\ (``NetCoalition''), the D.C. Circuit upheld the Commission's use
of a market-based approach in evaluating the fairness of market data
fees against a challenge claiming that Congress mandated a cost-based
approach.\25\ 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.'' \26\
---------------------------------------------------------------------------

    \24\ NetCoalition v. SEC, 615 F.3d 525 (D.C. Cir. 2010).
    \25\ See NetCoalition, at 534-535.
    \26\ 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'. . . .'' \27\ 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.
---------------------------------------------------------------------------

    \27\ Id. at 539 (quoting Securities Exchange Act Release No.
59039 (December 2, 2008), 73 FR 74770, 74782-83 (December 9, 2008)
(SR-NYSEArca-2006-21)).
---------------------------------------------------------------------------

Options 7, Section 3
    The Exchange's proposal to amend Options 7, Section 3, with respect
to its PIXL pricing for SPY options is reasonable because it will
continue to incentivize members and member organizations to transact a
greater number of SPY Complex PIXL Orders while also incentivizing
members and member organizations to submit Customer order flow on Phlx.
While the proposal no longer offers the $0.12 per contract rebate that
is available today for the PIXL Agency Order when that PIXL Order is
contra to other than the Initiating Order, the Exchange believes that
market participants will continue to be incentivized to submit PIXL
Agency Orders to Phlx because the Exchange continues to offer a rebate
of $0.40 per contract when the PIXL Order is contra to other than the
Initiating Order. Requiring SPY Complex PIXL Orders greater than 499
contracts to be contra to an Initiating Order to receive the rebate,
provided the member or member organization executes an average of 2,500
contracts per day of SPY Complex PIXL Orders in a month, will continue
to encourage members and member organizations to submit order flow to
Phlx to obtain the rebate. As is the case today, when the PIXL Order is
contra to other than the Initiating Order, the PIXL Order is assessed
$0.00 per contract, unless the PIXL Order is a Customer, in which case
the Customer receives a rebate of $0.40 per contract.
    The Exchange's proposal to amend Options 7, Section 3, Rebates and
Fees for Adding and Removing Liquidity in SPY, with respect to its PIXL
pricing for SPY options is equitable and not unfairly discriminatory
because all members and member organizations are eligible for the
proposed rebate, provided they met the requisite qualifications. Any
member or member organization may enter a qualifying order into the
PIXL Auction. Members and member organizations would be uniformly paid
the applicable rebate. Additionally, all market participants may
interact with order flow which members and member organizations must
transact in connection with this rebate.
Options 7, Section 4
QCC
    The Exchange's proposal to amend Options 7, Section 4, with respect
to its QCC Rebates, to reduce the current six tier rebate schedule to a
proposed two tier schedule is reasonable because the proposal will
incentivize members and member organizations to submit a greater amount
of QCC Orders to Phlx. With this proposal, the Exchange would pay a
Tier 1 QCC Rebate of $0.09 on all qualifying executed electronic QCC
Orders and Floor QCC Orders up to 999,999 contracts in a month. The QCC
Rebate would be paid for each contract from the first execution up to
999,999 contracts in a month. Today, a Member will not receive a Tier 1
QCC Rebate if they enter 99,999 contracts or fewer in a month, however
once a Member enters 100,000 or more contracts, the Member would
qualify for the current Tier 2 QCC Rebate for all 100,000 contracts.
With this proposal all qualifying executed electronic QCC Orders and
Floor QCC Orders up to 999,999 contracts in a month would be entitled
to the proposed $0.09 per contract Tier 1 QCC Rebate. Additionally,
while today the Exchange pays a Tier 5 QCC rebate of $0.09 per contract
for qualifying executed electronic QCC Orders and Floor QCC Orders from
700,000 to 999,999 contracts in a month, with this proposal the $0.09
per contract Tier 1 QCC Rebate would be paid to Members who submit up
to 999,999 contracts in a month. Also, the Exchange would pay a Tier 2
QCC Rebate of $0.17 per contract on all qualifying executed electronic
QCC Orders and Floor QCC Orders of $1,000,000 contracts or more in a
month. Today, the Exchange pays a Tier 6 QCC Rebate of $0.11 per
contract for qualifying executed electronic QCC Orders and Floor QCC
Orders over $1,000,000 contracts in a month. The proposed Tier 2 QCC
Rebate would be increased to $0.17 per contract for $1,000,000
contracts or more in a month.
    The Exchange's proposal to amend Options 7, Section 4, with respect
to its QCC Rebates, to reduce the current six tier rebate schedule to a
proposed two tier schedule is equitable and not unfairly discriminatory
because all members and member organizations may qualify for a QCC
Rebate provided the member or member organization executed qualifying
electronic QCC Orders and Floor QCC Orders.
Monthly Firm Fee Cap
    The Exchange's proposal to amend Options 7, Section 4, with respect
to the Monthly Firm Fee Cap, to increase the Monthly Firm Fee Cap from
$75,000 to $150,000 is reasonable because despite the increase, the
Exchange believes Firms will continue to be incentivized by the
opportunity to pay no fees beyond the $150,000 cap. The Monthly Firm
Fee Cap has remained at $75,000 since 2010. Other members and member
organizations may interact with the order flow submitted by Firms to
Phlx to reach the cap.
    The Exchange's proposal to amend Options 7, Section 4, with respect
to the Monthly Firm Fee Cap, to increase the Monthly Firm Fee Cap from
$75,000 to $150,000 is equitable and not unfairly discriminatory as
other market participants benefit from an opportunity to pay reduced
fees on Phlx as do Firms. Today, Customers are not assessed an Options
Transaction Charge in multiply-listed Penny or non-Penny Symbols.\28\
Customer liquidity benefits all market participants by providing more
trading opportunities. An increase in the activity of these market
participants in turn facilitates tighter spreads, which may cause an
additional corresponding increase in order flow from other market
participants. Today, Lead Market Makers and Market Makers are subject
to a Monthly Market Maker Cap of $500,000 for: (i) electronic Option
Transaction Charges, excluding surcharges and excluding options
overlying broad-based index options symbols listed within Options 7,
Section 5.A; and (ii) QCC Transaction Fees (as defined in Exchange
Options 3, Section 12 and Floor QCC Orders, as defined in Options 8,
Section 30(e)).\29\ With respect to Broker-Dealers, today, the Exchange
waives the Floor Options Transaction Charge for Broker-Dealers
executing facilitation orders pursuant to Options 8, Section 30 when
such members would otherwise incur this charge for trading in their own
proprietary account contra to a Customer (``BD-Customer
Facilitation''), if the member's BD-Customer Facilitation average daily
volume

(including both FLEX and non-FLEX transactions) exceeds 10,000
contracts per day in a given month.\30\ Finally, today, Professional
Floor Options Transaction Charges are less favorable than Customers but
more favorable than Firms as Broker-Dealers are assessed a lower
Options Transaction Charge as compared to Floor Lead Market Makers,
Floor Market Makers. Additionally, the Exchange believes that the
proposal is equitable and not unfairly discriminatory because members
and member organizations that are JBOs \31\ could be subject to the
Firm Related Equity Option Cap, as are other members, as long as the
JBO trades for their own proprietary account. Additionally, the
proposed change would encourage JBOs that are not members or member
organizations to seek to become members or member organizations to
further reduce their transaction fees.
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    \28\ See Options 7, Section 4.
    \29\ See Options 7, Section 4. The trading activity of separate
Lead Market Maker 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 Options 7, Section
4) are excluded from the Monthly Market Maker Cap. Lead Market
Makers or Market Makers that (i) are on the contra-side of an
electronically-delivered and executed Customer order, excluding
responses to a PIXL auction; and (ii) have reached the Monthly
Market Maker Cap will be assessed fees as follows: $0.05 per
contract Fee for Adding Liquidity in Penny Symbols; $0.18 per
contract Fee for Removing Liquidity in Penny Symbols; $0.18 per
contract in Non-Penny Symbols; and $0.18 per contract in a non-
Complex electronic auction, including the Quote Exhaust auction and,
for purposes of this fee, the opening process. A Complex electronic
auction includes, but is not limited to, the Complex Order Live
Auction (``COLA''). Transactions which execute against an order for
which the Exchange broadcast an order exposure alert in an
electronic auction will be subject to this fee.
    \30\ See Options 7, Section 4, which states, ``. . . In
addition, the Broker-Dealer Floor Options Transaction Charge
(including Cabinet Options Transaction Charges) will be waived for
members executing facilitation orders pursuant to Options 8, Section
30 when such members would otherwise incur this charge for trading
in their own proprietary account contra to a Customer (`BD-Customer
Facilitation'), if the member's BD-Customer Facilitation average
daily volume (including both FLEX and non-FLEX transactions) exceeds
10,000 contracts per day in a given month. NDX, NDXP, and XND
Options Transactions will be excluded from each of the waivers set
forth in the above paragraph.''
    \31\ 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 Options 6D, Section 1. See Options 7, Section 1(c).
---------------------------------------------------------------------------

Options 7, Section 6
    The Exchange's proposal to amend Options 7, Section 6, with respect
to its PIXL pricing \32\ is reasonable because it will continue to
incentivize members and member organizations to transact a greater
number of Complex PIXL Orders while also incentivizing members and
member organizations to submit Customer order flow on Phlx. While the
proposal no longer offers the $0.12 per contract rebate that is
available today for the PIXL Agency Order when that PIXL Order is
contra to other than the Initiating Order, the Exchange believes that
market participants will continue to be incentivized to submit PIXL
Agency Orders to Phlx because the Exchange continues to offer Category
C and D rebates for Complex Orders when the PIXL Order is contra to
other than the Initiating Order.\33\ Requiring Complex PIXL Orders
greater than 499 contracts to be contra to an Initiating Order to
receive the rebate, provided the member or member organization executes
an average of 2,500 contracts per day of Complex PIXL Orders in a
month, will continue to encourage members and member organizations to
submit order flow to Phlx to obtain the rebate.
---------------------------------------------------------------------------

    \32\ The PIXL pricing in Options 7, Section excludes SPY
options.
    \33\ When a PIXL Order is contra to a PIXL Auction Responder, a
Customer PIXL Order will be assessed $0.00 per contract, other Non-
Customer PIXL Orders will be assessed $0.30 per contract in Penny
Symbols or $0.38 per contract in Non-Penny Symbols. A Responder that
is a Lead Market Maker or a Market Maker will be assessed $0.25 per
contract in Penny Symbols or $0.40 per contract in Non-Penny
Symbols. Other Non-Customer Responders will be assessed $0.48 per
contract in Penny Symbols or $0.70 per contract in Non-Penny Symbols
when contra to a PIXL Order. A Responder that is a Customer will be
assessed $0.00 per contract in Penny Symbols and Non-Penny Symbol.
When a PIXL Order is contra to a resting order or quote a Customer
PIXL Order will be assessed $0.00 per contract, other Non-Customer
will be assessed $0.30 per contract and the resting order or quote
will be assessed the appropriate Options Transaction Charge in
Options 7, Section 4.
---------------------------------------------------------------------------

    The Exchange's proposal to amend Options 7, Section 6, with respect
to its PIXL pricing is equitable and not unfairly discriminatory
because all members and member organizations are eligible for the
proposed rebate, provided they met the requisite qualifications. Any
member or member organization may enter a qualifying order into the
PIXL Auction. Members and member organizations would be uniformly paid
the applicable rebate. Additionally, all market participants may
interact with order flow which members or member organizations must
transact in connection with this 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.
Intermarket Competition
    The proposal does not impose an undue burden on intermarket
competition. The Exchange believes its proposal remains competitive
with other options markets and will offer market participants with
another choice of where to transact options. 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. 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.
Intramarket Competition
    The proposed amendments do not impose an undue burden on
intramarket competition.
Options 7, Section 3
    The Exchange's proposal to amend Options 7, Section 3, Rebates and
Fees for Adding and Removing Liquidity in SPY, with respect to its PIXL
pricing for SPY options does not impose an undue burden on competition
because all members and member organizations are eligible for the
proposed rebate, provided they met the requisite qualifications. Any
member or member organization may enter a qualifying order into the
PIXL Auction. Members and member organizations would be uniformly paid
the applicable rebate. Additionally, all market participants may
interact with order flow which members and member organizations must
transact in connection with this rebate.
Options 7, Section 4
QCC
    The Exchange's proposal to amend Options 7, Section 4, with respect
to its QCC Rebates, to reduce the current six tier rebate schedule to a
proposed two tier schedule does not impose an undue burden on
competition because all members and member organizations may qualify
for a QCC Rebate provided the member or member organization executed
qualifying electronic QCC Orders and Floor QCC Orders.
Monthly Firm Fee Cap
    The Exchange's proposal to amend Options 7, Section 4, with respect
to the Monthly Firm Fee Cap, to increase the Monthly Firm Fee Cap from
$75,000 to $150,000 does not impose an undue burden on competition as
other market participants benefit from an opportunity to pay reduced
fees on Phlx as do Firms. Today, Customers are not assessed an Options
Transaction Charge in multiply-listed Penny or non-Penny Symbols.\34\
Customer liquidity benefits all market participants by providing more
trading opportunities. An increase in the

activity of these market participants in turn facilitates tighter
spreads, which may cause an additional corresponding increase in order
flow from other market participants. Today, Lead Market Makers and
Market Makers are subject to a Monthly Market Maker Cap of $500,000
for: (i) electronic Option Transaction Charges, excluding surcharges
and excluding options overlying broad-based index options symbols
listed within Options 7, Section 5.A; and (ii) QCC Transaction Fees (as
defined in Exchange Options 3, Section 12 and Floor QCC Orders, as
defined in Options 8, Section 30(e)).\35\ With respect to Broker-
Dealers, today, the Exchange waives the Floor Options Transaction
Charge for Broker-Dealers executing facilitation orders pursuant to
Options 8, Section 30 when such members would otherwise incur this
charge for trading in their own proprietary account contra to a
Customer (``BD-Customer Facilitation''), if the member's BD-Customer
Facilitation average daily volume (including both FLEX and non-FLEX
transactions) exceeds 10,000 contracts per day in a given month.\36\
Finally, today, Professional Floor Options Transaction Charges are less
favorable than Customers but more favorable than Firms as Broker-
Dealers are assessed a lower Options Transaction Charge as compared to
Floor Lead Market Makers, Floor Market Makers. Additionally, the
Exchange believes that the proposal is equitable and not unfairly
discriminatory because members and member organizations that are JBOs
\37\ could be subject to the Firm Related Equity Option Cap, as are
other members, as long as the JBO trades for their own proprietary
account. Additionally, the proposed change would encourage JBOs that
are not members or member organizations to seek to become members or
member organizations to further reduce their transaction fees.
---------------------------------------------------------------------------

    \34\ See Options 7, Section 4.
    \35\ See Options 7, Section 4. The trading activity of separate
Lead Market Maker 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 Options 7, Section
4) are excluded from the Monthly Market Maker Cap. Lead Market
Makers or Market Makers that (i) are on the contra-side of an
electronically-delivered and executed Customer order, excluding
responses to a PIXL auction; and (ii) have reached the Monthly
Market Maker Cap will be assessed fees as follows: $0.05 per
contract Fee for Adding Liquidity in Penny Symbols; $0.18 per
contract Fee for Removing Liquidity in Penny Symbols; $0.18 per
contract in Non-Penny Symbols; and $0.18 per contract in a non-
Complex electronic auction, including the Quote Exhaust auction and,
for purposes of this fee, the opening process. A Complex electronic
auction includes, but is not limited to, the Complex Order Live
Auction (``COLA''). Transactions which execute against an order for
which the Exchange broadcast an order exposure alert in an
electronic auction will be subject to this fee.
    \36\ See Options 7, Section 4, which states, ``. . . In
addition, the Broker-Dealer Floor Options Transaction Charge
(including Cabinet Options Transaction Charges) will be waived for
members executing facilitation orders pursuant to Options 8, Section
30 when such members would otherwise incur this charge for trading
in their own proprietary account contra to a Customer (`BD-Customer
Facilitation'), if the member's BD-Customer Facilitation average
daily volume (including both FLEX and non-FLEX transactions) exceeds
10,000 contracts per day in a given month. NDX, NDXP, and XND
Options Transactions will be excluded from each of the waivers set
forth in the above paragraph.''
    \37\ 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 Options 6D, Section 1. See Options 7, Section 1(c).
---------------------------------------------------------------------------

Options 7, Section 6
    The Exchange's proposal to amend Options 7, Section 6, with respect
to its PIXL pricing does not impose an undue burden on competition
because all members and member organizations are eligible for the
proposed rebate, provided they met the requisite qualifications. Any
member or member organization may enter a qualifying order into the
PIXL Auction. Members and member organizations would be uniformly paid
the applicable rebate. Additionally, all market participants may
interact with order flow which members and member organizations must
transact in connection with this rebate.

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.\38\
---------------------------------------------------------------------------

    \38\ 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 protected]. Please include
File Number SR-Phlx-2022-41 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-2022-41. 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 website (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 website 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. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly.
    All submissions should refer to File Number SR-Phlx-2022-41 and
should

be submitted on or before November 28, 2022.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\39\
---------------------------------------------------------------------------

    \39\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2022-24142 Filed 11-4-22; 8:45 am]
BILLING CODE 8011-01-P