[Federal Register Volume 82, Number 220 (Thursday, November 16, 2017)]
[Notices]
[Pages 53498-53499]
[FR Doc No: 2017-24795]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

Combined Notice of Filings #1

    Take notice that the Commission received the following electric
rate filings:

    Docket Numbers: ER10-2924-011; ER10-2480-010; ER10-2718-027; ER10-
2719-026; ER10-2934-010; ER10-2950-010; ER10-2959-011; ER10-2961-011;
ER10-3193-011; ER11-2041-012; ER11-2042-012; ER14-2498-006; ER14-2500-
006; ER16-2462-005.
    Applicants: Berkshire Power Company, LLC, Cogen Technologies Linden
Venture, L.P., East Coast Power Linden Holding, L.L.C., Newark Energy
Center, LLC, EIF Newark, LLC, Kleen Energy Systems, LLC, Chambers
Cogeneration, Limited Partnership, Logan Generating Company, L.P.,
Spruance Genco, LLC, Edgecombe Genco, LLC, Brooklyn Navy Yard
Cogeneration Partners, Innovative Energy Systems, LLC, Seneca Energy
II, LLC, Oregon Clean Energy, LLC.
    Description: Confirmation Letter to the June 29, 2016 MBR Triennial
Filings of Kleen Energy Systems, LLC, et al.
    Filed Date: 11/8/17.
    Accession Number: 20171108-5082.
    Comments Due: 5 p.m. ET 11/29/17.

    Docket Numbers: ER14-649-005.
    Applicants: Midcontinent Independent System Operator, Entergy
Services, Inc.
    Description: Report Filing: 2017-11-09_Revised Entergy Refund
Report pursuant to Settlement to be effective N/A.
    Filed Date: 11/9/17.
    Accession Number: 20171109-5067.
    Comments Due: 5 p.m. ET 11/30/17.

    Docket Numbers: ER17-2457-001.
    Applicants: Rock Creek Wind Project, LLC.
    Description: Tariff Amendment: Rock Creek Wind Project, LLC MBR
Tariff to be effective 9/15/2017.
    Filed Date: 11/8/17.
    Accession Number: 20171108-5160.
    Comments Due: 5 p.m. ET 11/29/17.

    Docket Numbers: ER18-105-001.
    Applicants: 65HK 8me LLC.
    Description: Tariff Amendment: 65HK 8me LLC Hayworth Shared
Facilities Agreement to be effective 10/20/2017.
    Filed Date: 11/8/17.
    Accession Number: 20171108-5195.
    Comments Due: 5 p.m. ET 11/29/17.

    Docket Numbers: ER18-106-001.
    Applicants: 87RL 8me LLC.
    Description: Tariff Amendment: 87RL 8me LLC Woodmere SFA to be
effective 10/20/2017.
    Filed Date: 11/8/17.
    Accession Number: 20171108-5198.
    Comments Due: 5 p.m. ET 11/29/17.

    Docket Numbers: ER18-107-001.
    Applicants: 65HK 8me LLC.
    Description: Tariff Amendment: 65HK 8me LLC Hayworth Co-Tenancy
Agreement to be effective 10/20/2017.
    Filed Date: 11/8/17.
    Accession Number: 20171108-5196.
    Comments Due: 5 p.m. ET 11/29/17.

    Docket Numbers: ER18-108-001.
    Applicants: 87RL 8me LLC.
    Description: Tariff Amendment: 87RL 8me LLC Woodmere Co-Tenancy
Agreement to be effective 10/20/2017.
    Filed Date: 11/8/17.
    Accession Number: 20171108-5197.
    Comments Due: 5 p.m. ET 11/29/17.

    Docket Numbers: ER18-268-000.
    Applicants: Southern Partners, INC.
    Description: Baseline eTariff Filing: Southern Partners, INC MBR
Application to be effective 11/9/2017.
    Filed Date: 11/9/17.
    Accession Number: 20171109-5003.
    Comments Due: 5 p.m. ET 11/30/17.

    Docket Numbers: ER18-269-000.
    Applicants: Southern California Edison Company.
    Description: Sec.  205(d) Rate Filing: LGIA SunPower Corporations,
Systems--Rosamond South East Project to be effective 11/10/2017.
    Filed Date: 11/9/17.
    Accession Number: 20171109-5004.
    Comments Due: 5 p.m. ET 11/30/17.

    Docket Numbers: ER18-270-000.
    Applicants: Southwestern Electric Power Company.
    Description: Sec.  205(d) Rate Filing: AECC Wedington Delivery
Point Agreement to be effective 10/13/2017.
    Filed Date: 11/9/17.
    Accession Number: 20171109-5045.
    Comments Due: 5 p.m. ET 11/30/17.

    Docket Numbers: ER18-271-000.
    Applicants: AEP Texas Inc.
    Description: Sec.  205(d) Rate Filing: AEP TX-Mozart Wind
Interconnection Agreement First Amend & Restated to be effective 10/12/
2017.
    Filed Date: 11/9/17.
    Accession Number: 20171109-5046.
    Comments Due: 5 p.m. ET 11/30/17.

    Docket Numbers: ER18-272-000.
    Applicants: Southwest Power Pool, Inc.
    Description: Sec.  205(d) Rate Filing: 3375 WAPA & Basin Electric
Power Interconnection Agr to be effective 10/25/2017.
    Filed Date: 11/9/17.
    Accession Number: 20171109-5064.
    Comments Due: 5 p.m. ET 11/30/17.

    Docket Numbers: ER18-273-000.
    Applicants: Public Service Company of New Mexico.
    Description: Initial rate filing: Executed 38 MW Transmission
Service Agreement between PNM and El Cabo Wind, LLC to be effective 10/
31/2017.
    Filed Date: 11/9/17.
    Accession Number: 20171109-5069.
    Comments Due: 5 p.m. ET 11/30/17.

    Docket Numbers: ER18-274-000.
    Applicants: Public Service Company of New Mexico.
    Description: Initial rate filing: Executed 170 MW Transmission
Service Agreement between PNM and El Cabo Wind, LLC to be effective 10/
31/2017.
    Filed Date: 11/9/17.
    Accession Number: 20171109-5070.
    Comments Due: 5 p.m. ET 11/30/17.

    Docket Numbers: ER18-275-000.
    Applicants: Alabama Power Company.
    Description: Sec.  205(d) Rate Filing: Tri-State II Solar Project
LGIA Filing to be effective 10/30/2017.

    Filed Date: 11/9/17.
    Accession Number: 20171109-5082.
    Comments Due: 5 p.m. ET 11/30/17.

    Docket Numbers: ER18-276-000.
    Applicants: Panda Hummel Station LLC.
    Description: Baseline eTariff Filing: FERC Electric Tariff, Volume
No. 1 (market-based rate application) to be effective 1/9/2018.
    Filed Date: 11/9/17.
    Accession Number: 20171109-5094.
    Comments Due: 5 p.m. ET 11/30/17.

    The filings are accessible in the Commission's eLibrary system by
clicking on the links or querying the docket number.
    Any person desiring to intervene or protest in any of the above
proceedings must file in accordance with Rules 211 and 214 of the
Commission's Regulations (18 CFR 385.211 and Sec.  385.214) on or
before 5:00 p.m. Eastern time on the specified comment date. Protests
may be considered, but intervention is necessary to become a party to
the proceeding.
    eFiling is encouraged. More detailed information relating to filing
requirements, interventions, protests, service, and qualifying
facilities filings can be found at: http://www.ferc.gov/docs-filing/efiling/filing-req.pdf. For other information, call<PHONE_NUMBER>
(toll free). For TTY, call<PHONE_NUMBER>.

    Dated: November 9, 2017.
Nathaniel J. Davis, Sr.,
Deputy Secretary.
[FR Doc. 2017-24795 Filed 11-15-17; 8:45 am]
 BILLING CODE 6717-01-P


Significant New Alternatives Policy Program

Refrigeration and Air Conditioning Sector

Risk Screen on Substitutes for HCFC-22 in Cold Storage Warehouses.

Substitute: Carbon Dioxide (CO2)

This risk screen does not contain Clean Air Act (CAA) Confidential
Business Information (CBI) and, therefore, may be disclosed to the
public.

INTRODUCTION

Ozone-depleting substances (ODS) are being phased out of production in
response to a series of diplomatic and legislative efforts that have
taken place over the past decade, including the Montreal Protocol and
the Clean Air Act Amendments of 1990 (CAAA).  The U.S. Environmental
Protection Agency (EPA), as authorized by Section 612 of the CAAA, is
developing a program to evaluate the human health and environmental
risks posed by alternatives to ODS.  The main purpose of EPA's program,
called the Significant New Alternatives Policy (SNAP) Program, is to
identify acceptable and unacceptable substitutes for ODS in specific end
uses.

EPA’s decision on the acceptability of a substitute is based largely
on the findings of a screening assessment of potential human health and
environmental risks posed by the substitute in specific applications.
EPA has already screened a large number of substitutes in many end uses
within all of the major ODS-using sectors, including refrigeration and
air conditioning, solvent cleaning, foam blowing, aerosols, fire
suppression, adhesives, coatings and inks, and sterilization. The
results of these risk screens are presented in a series of Background
Documents that are available in EPA's docket.

The purpose of this report is to supplement EPA’s Background Document
on the refrigeration and air conditioning sector (EPA 1994) (hereinafter
referred to as the Background Document) by adding to the list of
potential substitutes for specific end-uses of HCFC-22 in this sector.
The proposed end-use considered in this analysis is chillers in cold
storage warehouses.  The specific proposed HCFC-22 substitute examined
in this report is carbon dioxide (CO2, or R-744).   The chillers and
their CO2 charge are expected to be located external to the building in
which they are used.

This risk screen addresses potential asphyxiation and toxicity risks to
workers during equipment manufacture and use.  Consumer or general
population exposures are not expected to occur.  Carbon dioxide is not
flammable, so a flammability analysis was not conducted.  The reader is
referred to the Background Document for a detailed discussion of the
methodologies used to conduct this risk screen.

Section 2 of this report summarizes the results of the risk screen for
the proposed substitute.  The remainder of the report is organized into
the following sections:

Section 3: Atmospheric Assessment

Section 4: Asphyxiation Assessment

Section 5: Toxicity Assessment

Section 6: Volatile Organic Compound Assessment

Section 7: References

SUMMARY OF RESULTS

Carbon dioxide is recommended for SNAP approval for use in cold storage
warehouse chillers.  EPA's risk screen indicates that the use of the
proposed substitute will be less harmful to the atmosphere than the
continued use of HCFC-22.   No significant asphyxiation or toxicity
risks to workers are expected.  EPA recommends that American Society of
Heating, Refrigerating and Air-Conditioning Engineers (ASHRAE) Standards
15 and 34 be followed, as well as Chapter 11 (“Refrigeration”) of
the International Mechanical Code.

ATMOSPHERIC ASSESSMENT

This section presents an assessment of the potential risks to
atmospheric integrity posed by the use of carbon dioxide in cold storage
warehouses.  The ODP, GWP, and atmospheric lifetime (ALT) of the
proposed substitute are presented in   REF _Ref175036149 \h  Table 1 .
The substitute is substantially less harmful to the ozone layer and has
less climate impact than HCFC-22.

Table   SEQ Table \* ARABIC  1 .  Atmospheric Impacts of Carbon Dioxide
Compared to HCFC-22.

Refrigerant	Ozone Depleting Potential (ODP)	Global Warming Potential
(GWP)	Atmospheric Lifetime years (ALT)

Carbon Dioxide	0 a	1 a	NA b

HCFC-22	0.055 c	1,500 d	12 c

a Carbon Dioxide SNAP Submission (IPS 2008).

b NA = Not Available; Meehl et al. (2007) report that a lifetime for CO2
“cannot be defined.”

c Available at: http://www.epa.gov/ozone/ods.html.

d IPCC, Second Assessment Report (1996).

ASPHYXIATION ASSESSMENT

Use of carbon dioxide in this proposed end-use is not expected to pose a
significant risk of asphyxiation to workers.  As the substitute is
proposed for use in a chiller whose charge is external to the building
in which it is used, leakage from the top of the building into the
warehouse is unlikely.  Subsequently, asphyxiation due to accidental
release of the substitute into the warehouse is not expected for the
proposed end-use.  To ensure that leakage into the warehouse does not
occur, it is recommended that the building be designed to prevent this,
which would be the norm, as cold storage facilities are designed to be
airtight and to segregate storage space from mechanical space.

While workers could be exposed to the substitute during installation or
maintenance of the system, the risk of asphyxiation is minimal as they
will be outside.  To minimize the potential for leaks during
installation and maintenance, it is recommended that workers receive
proper training.   Also, because carbon dioxide is denser than air there
is the potential for pooling of CO2 in low-lying spaces which could
inadvertently cause an oxygen-deficient atmosphere.  As the system will
be located outside, natural airflow will likely disperse any CO2.which
accumulates; however it is recommended that those installing the
chillers be aware that CO2 can accumulate in low-lying areas.

TOXICITY ASSESSMENT

5. 1.  Toxicity Reference Values

To assess potential health risks from exposure to this substitute in
cold storage warehouses, EPA identified the relevant toxicity threshold
values for comparison to modeled exposure concentrations for different
scenarios.  For the occupational exposure analysis, potential risks from
chronic and acute worker exposure were evaluated by comparing exposure
concentrations to available occupational exposure limits.  Occupational
exposure limits are typically established for either an eight-hour or
ten-hour time period for long-term exposure, or for a 10 to 30-minute
period for short-term exposure, as shown in   REF _Ref222734171 \h  \*
MERGEFORMAT  Table 2 .    REF _Ref225834278 \h  \* MERGEFORMAT  Table 3
provides definitions for acronyms used in   REF _Ref222734171 \h  \*
MERGEFORMAT  Table 2 .  EPA’s approach for identifying or developing
these values is discussed in Chapter 3 of the Background Document.

Table   SEQ Table \* ARABIC  2 .  Toxicity Levels of Carbon Dioxide.

	Long-term Exposure

ppm	Short-term Exposure

ppm

Carbon Dioxide	5000a

(OSHA PEL/NIOSH REL)	30,000a (NIOSH REL-STEL)

40,000a (IDLH)

a  http://www.cdc.gov/Niosh/npg/npgd0103.html

Table   SEQ Table \* ARABIC  3 .  Explanation of Toxicity-Related
Acronyms. a

Organization 	Definition

OSHA	Occupational Safety and Health Administration

NIOSH	National Institute for Occupational Safety and Health

Exposure Limit	Definition	Explanation

IDLH	Immediately Dangerous to Life and Health	If exposed to this
concentration, room occupants are expected to be able to escape the room
within 30 minutes without experiencing escape-impairing or irreversible
health effects.

PEL	Permissible Exposure Limit	This is an 8-hour time-weighted average
exposure limit set by OSHA.

REL- STEL	Recommended Exposure Limit - Short-term exposure limit	This is
a 15-minute time-weighted average exposure limit set by NIOSH.

aAll information in this table taken from EPA (1994).

5. 2.  Occupational Exposure

As discussed in Section   REF _Ref232231072 \r \h  4 , significant
exposure to carbon dioxide in this end-use is not expected for workers
as the substitute is proposed for use in a chiller whose charge is
external to the building in which it is used.  Further, exposure is not
expected during manufacture as the system would be charged with carbon
dioxide on-site during installation, not at the manufacturing facility.

To ensure that leakage into the warehouse during installation or
maintenance does not occur, it is recommended that the building be
designed to prevent this.   Additionally, while workers could be exposed
to the substitute during installation or maintenance of the system,
toxicity risks are minimal as workers will be outside.  It is
recommended that workers receive proper training to minimize the
potential for leaks during installation and maintenance.

5. 3.  Consumer and General Population Exposures

Consumer and General Population modeling was not performed because
exposures to the proposed substitute are not expected for these groups.

VOLATILE ORGANIC COMPOUND (VOC) ASSESSMENT

Carbon dioxide has been exempted as a VOC under the CAA (40 CFR 51.100).

REFERENCES

EPA. 2000.  Carbon Dioxide as a Fire Suppressant: Examining the Risks.
February 2000. Available at: <
http://www.epa.gov/Ozone/snap/fire/co2/co2report.html>.

EPA. 1994.  Significant New Alternatives Policy Technical Background
Document:  Risk Screen on the Use of Substitutes for Class I
Ozone-depleting Substances: Refrigeration and Air Conditioning.
Stratospheric Protection Division.  March 1994.

ICF. 1997. Physiological Effects of Alternative Fire Protection Agents -
Hypoxic Atmospheres Conference. Stephanie Skaggs prepared the
proceedings of the conference held May 22, 1997 in New London, CT.

Integrated Packaged Systems (IPS). 2008. Significant New Alternatives
Policy Program Submission to the United States Environmental Protection
Agency.  December 2008.

Meehl, G.A., T.F. Stocker, W.D. Collins, P. Friedlingstein, A.T. Gaye,
J.M. Gregory, A. Kitoh, R. Knutti, J.M. Murphy, A. Noda, S.C.B. Raper,
I.G. Watterson, A.J. Weaver and Z.-C. Zhao.  2007. Global Climate
Projections. In: Climate Change 2007: The Physical Science Basis
.Contribution of Working Group I to the Fourth Assessment Report of the
Intergovernmental Panel on Climate Change [Solomon, S., D. Qin, M.
Manning, Z. Chen, M. Marquis, K.B. Averyt, M. Tignor and H.L. Miller
(eds.)]. Cambridge University Press, Cambridge, United Kingdom and New
York, NY, USA.

 This has been a concern for carbon dioxide fire extinguishing systems
and is addressed in several fire protection regulations (EPA 2000).

	Page   PAGE  3 	   July 2, 2009


[Federal Register Volume 80, Number 50 (Monday, March 16, 2015)]
[Notices]
[Pages 13641-13646]
[FR Doc No: 2015-05857]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-74460; File No. SR-Phlx-2015-21]

Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change Relating to
Customer Rebate Program, Multiply Listed Options, PIXL Pricing

March 10, 2015.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on February 26, 2015, NASDAQ OMX PHLX LLC (``Phlx'' or
``Exchange'') filed with the Securities and Exchange Commission
(``SEC'' or ``Commission'') the proposed rule change as described in
Items I, II, and III below, which Items have been prepared by the
Exchange. The Commission is publishing this notice to solicit comments
on the proposed rule change from interested persons.
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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 the
Substance of the Proposed Rule Change

    The Exchange proposes to modify the Phlx Pricing Schedule
(``Pricing Schedule''). Specifically, the Exchange proposes to amend
pricing in Section B, entitled ``Customer Rebate Program,'' Section II,
entitled ``Multiply Listed Options Fees,'' \3\ and Section IV, Part A,
entitled ``PIXL Pricing,'' \4\ of the Pricing Schedule. The Exchange
proposes these amendments in order to: (i) Establish a cap on rebates
specifically for electronic Simple PIXL and Complex \5\ PIXL Orders and
not pay rebates when electronic \6\ Customer \7\ Complex PIXL Orders
execute against electronic Complex PIXL Initiating Orders; (ii)
increase the assessment of fees for electronic Firm \8\ Simple Orders
underlying options in AAPL, BAC, EEM, FB, FXI, IWM, QQQ, TWTR, VXX and
XLF; \9\ (iii) increase the assessment of fees for electronic Complex
Orders for Professionals,\10\ Firms and Broker-Dealers; \11\ (iv)
increase the assessment of fees for adding liquidity in Penny Pilot
Options \12\ for Specialists \13\ and Market Makers; \14\ (v) clarify
that the fee for Specialists and Market Makers that have reached their
Monthly Market Maker Cap \15\ in a non-complex electronic auction will
include transactions which execute against an order for which the
Exchange broadcast an order exposure alert; (vi) amend the Initiating
Order Fee for Simple PIXL and Complex PIXL Initiating Orders; and (vii)
amend the requirements to receive the PIXL Initiating Order Fee
discount to require a member or member organization under Common
Ownership \16\ to qualify for a Tier 4 or Tier 5 Customer Rebate in
Section B of the Pricing Schedule.
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    \3\ This includes options overlying equities, exchange traded
funds (``ETFs''), exchange traded notes (``ETNs'') and indexes which
are Multiply Listed.
    \4\ PIXL\SM\ is the Exchange's price improvement mechanism known
as Price Improvement XL or PIXL. See Rule 1080(n).
    \5\ A Complex Order is any order involving the simultaneous
purchase and/or sale of two or more different options series in the
same underlying security, priced at a net debit or credit based on
the relative prices of the individual components, for the same
account, for the purpose of executing a particular investment
strategy. Furthermore, a Complex Order can also be a stock-option
order, which is an order to buy or sell a stated number of units of
an underlying stock or ETF coupled with the purchase or sale of
options contract(s). See Exchange Rule 1080, Commentary .08(a)(i)
[sic].
    \6\ A transaction resulting from an order that was
electronically delivered utilizes Phlx XL. See Exchange Rules 1014
and 1080. Electronically delivered orders do not include orders
transacted on the Exchange floor. A transaction resulting from an
order that is non-electronically-delivered is represented on the
trading floor by a floor broker. See Exchange Rule 1063. All orders
will be either electronically or non-electronically delivered.
    \7\ The term ``Customer'' defines a person or entity that is
neither a broker-dealer nor a direct or indirect affiliate of a
broker-dealer, and includes a ``Professional'' as defined in Rule
1000(b)(14). See Securities Exchange Act Release Nos. 66755 (April
6, 2012), 77 FR 22037 (April 12, 2012) (SR-Phlx-2012-42) (notice of
filing and immediate effectiveness).
    \8\ 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.
    \9\ AAPL, BAC, EEM, FB, FXI, IWM, QQQ, TWTR, VXX and XLF are
currently Penny Pilot options (together ``certain Penny Options'').
The $ 0.27 per contract pricing proposed herein is symbol-specific
and will continue to apply to these symbols whether or not they are
deleted from or added to the Penny Pilot.
    \10\ The term ``Professional'' means any person or entity that
(i) is not a broker or dealer in securities, and (ii) places more
than 390 orders in listed options per day on average during a
calendar month for its own beneficial account(s). See Rule
1000(b)(14).
    \11\ The term ``Broker-Dealer'' applies to any transaction which
is not subject to any of the other transaction fees applicable
within a particular category.
    \12\ The Penny Pilot was established in January 2007 and was
last extended in 2014. See Securities Exchange Act Release Nos.
55153 (January 23, 2007), 72 FR 4553 (January 31, 2007) (SR-Phlx-
2006-74) (notice of filing and approval order establishing Penny
Pilot); and 73688 (November 25, 2014), 79 FR 71484 (December 2,
2014) (SR-Phlx-2014-77) (notice of filing and immediate
effectiveness extending the Penny Pilot through June 30, 2015). All
Penny Pilot Options listed on the Exchange can be found at http://www.nasdaqtrader.com/Micro.aspx?id=phlx.
    \13\ A Specialist is an Exchange member who is registered as an
options specialist pursuant to Rule 1020(a).
    \14\ A ``Market Maker'' includes Registered Options Traders
(Rule 1014(b)(i) and (ii)), which includes Streaming Quote Traders
(see Rule 1014(b)(ii)(A)) and Remote Streaming Quote Traders (see
Rule 1014(b)(ii)(B)). Directed Participants are also market makers.
    \15\ Specialists and Market Makers are subject to a ``Monthly
Market Maker Cap'' of $500,000 for: (i) Electronic and floor Option
Transaction Charges; (ii) QCC Transaction Fees (as defined in
Exchange Rule 1080(o) and Floor QCC Orders, as defined in 1064(e));
and (iii) fees related to an order or quote that is contra to a PIXL
Order or specifically responding to a PIXL auction [sic]. The
trading activity of separate Specialist and Market Maker member
organizations is aggregated in calculating the Monthly Market Maker
Cap if there is Common Ownership between the member organizations.
All dividend, merger, short stock interest, reversal and conversion,
jelly roll and box spread strategy executions (as defined in Section
II) are excluded from the Monthly Market Maker Cap.
    \16\ The term ``Common Ownership'' shall mean members or member
organizations under 75% common ownership or control.
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    The text of the proposed rule change is available on the Exchange's
Web site at http://nasdaqomxphlx.cchwallstreet.com/, at the principal
office of the Exchange, and at the Commission's Public Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The purpose of this filing is to modify the Pricing Schedule to
specifically amend fees in Section B, entitled ``Customer Rebate
Program,'' Section II, entitled ``Multiply Listed Options Fees,'' and
Section IV, Part A, entitled ``PIXL Pricing.'' The Exchange proposes

various amendments to the Pricing Schedule as described below.
Section B--Customer Rebate Program
    Currently, the Exchange has a Customer Rebate Program consisting of
five tiers that pays Customer rebates on two categories, A and B,\17\
of transactions. A Phlx member qualifies for a certain rebate tier
based on the percentage of total national customer volume in Multiply
Listed equity and ETFs options classes, excluding SPY Options that it
transacts monthly on Phlx. The Exchange calculates Customer volume in
Multiply Listed Options (including SPY options) by totaling
electronically-delivered and executed volume, excluding volume
associated with electronic Qualified Contingent Cross Orders,\18\ as
defined in Exchange Rule 1080(o).\19\ The Exchange proposes, as
discussed below, to establish a cap for Simple PIXL Orders (Category A)
and Complex PIXL Orders (Category B) rebates. Also, the Exchange is
proposing to not offer rebates when Customer Complex PIXL Orders
execute against Complex PIXL Initiating Orders for Category B rebates.
---------------------------------------------------------------------------

    \17\ Category A and Category B rebates are described below.
    \18\ A QCC Order is comprised of an order to buy or sell at
least 1000 contracts that is identified as being part of a qualified
contingent trade, as that term is defined in Rule 1080(o)(3),
coupled with a contra-side order to buy or sell an equal number of
contracts. The QCC Order must be executed at a price at or between
the National Best Bid and Offer and be rejected if a Customer order
is resting on the Exchange book at the same price. A QCC Order shall
only be submitted electronically from off the floor to the PHLX XL
II System. See Rule 1080(o). See also Securities Exchange Act
Release No. 64249 (April 7, 2011), 76 FR 20773 (April 13, 2011) (SR-
Phlx-2011-47) (a rule change to establish a QCC Order to facilitate
the execution of stock/option Qualified Contingent Trades (``QCTs'')
that satisfy the requirements of the trade through exemption in
connection with Rule 611(d) of the Regulation NMS).
    \19\ Members and member organizations under common ownership may
aggregate their Customer volume for purposes of calculating the
Customer Rebate Tiers and receiving rebates. Common ownership means
members or member organizations under 75% common ownership or
control.
---------------------------------------------------------------------------

    Currently, a Category A Customer rebate is paid to members
executing electronically-delivered Customer Simple Orders in Penny
Pilot Options and Customer Simple Orders in Non-Penny Pilot Options in
Section II symbols. Rebates are paid on Customer PIXL Orders in Section
II symbols that execute against non-Initiating Order interest. In the
instance where member organizations qualify for Tier 4 or higher in the
Customer Rebate Program, Customer PIXL Orders that execute against a
PIXL Initiating Order are paid a rebate of $0.14 per contract. Today
there is no rebate cap. The Exchange proposes to establish a cap for
Category A rebates as follows: rebates on Customer PIXL Orders will be
capped at 4,000 contracts per order for Simple PIXL Orders. The
Exchange believes that the Category A rebates will continue to
encourage members to send Customer liquidity to Phlx despite the cap on
PIXL Simple Order rebates at the proposed 4,000 contracts.
    Currently, a Category B rebate is paid to members executing
electronically-delivered Customer Complex Orders in Penny Pilot Options
and Non-Penny Pilot Options in Section II symbols. Rebates are paid on
Customer PIXL Complex Orders in Section II symbols that execute against
non-Initiating Order interest. In the instance where member
organizations qualify for Tier 4 or higher in the Customer Rebate
Program, Customer Complex PIXL Orders that execute against a Complex
PIXL Initiating Order are paid a rebate of $0.17 per contract. The
Category B rebate is not paid when an electronically-delivered Customer
Complex Order, including Customer Complex PIXL Order, executes against
another electronically-delivered Customer Complex Order. Today there is
no rebate cap. The Exchange proposes to establish a cap for Category B
Customer Complex Order rebates as follows: rebates on Customer PIXL
Orders will be capped at 4,000 contracts per order leg for Complex PIXL
Orders. The Exchange believes that the Category B rebates will continue
to encourage members to send Customer liquidity to Phlx despite the cap
on PIXL Complex Order rebates at the proposed 4,000 contracts per order
leg.
    The Exchange also proposes to amend the rule change to specify that
Category B Customer Complex PIXL Orders that execute against a Complex
PIXL Initiating Order will not be paid a rebate. As noted above, the
Category B rebate is not paid when an electronically-delivered Customer
Complex Order, including Customer Complex PIXL Order, executes against
another electronically-delivered Customer Complex Order, which includes
a Complex PIXL Initiating Order.
Section II--Multiply Listed Options
    The Exchange proposes to amend the discounted amount that is
currently assessed to a Firm for electronic orders in certain Penny
Options. Today, the Exchange assesses a Firm a $0.48 per contract
Options Transaction Charge for electronic transactions in Penny Pilot
Options and a $0.70 per contract Options Transaction Charge for Non-
Penny Pilot Options. The Exchange also offers a discount to Firms
transacting electronic Simple Orders in certain Penny Options of $0.25
per contract. The Exchange is proposing to increase the discount fee
from $0.25 to $0.27 per contract,\20\ resulting in a higher effective
fee. Despite the increase in the discount fee, the Exchange believes
that Firms will continue to be incentivized to transact volume in these
symbols.
---------------------------------------------------------------------------

    \20\ The fee reduction today is only applicable to Penny Pilot
Options as all of the symbols, AAPL, BAC, EEM, FB, FXI, IWM, QQQ,
TWTR, VXX and XLF, are Penny Pilot symbols.
---------------------------------------------------------------------------

    The Exchange proposes to increase the discount fee for electronic
Complex Orders to Professionals, Broker-Dealers and Firms in Penny and
Non-Penny Pilot Options regarding electronic Complex Orders. Today,
Professionals, Broker-Dealers and Firms are offered the opportunity to
reduce Options Transaction Charges in Penny Pilot Complex Orders from
$0.48 to $0.30 per contract and to reduce Options Transaction Charges
in Non-Penny Pilot Complex Orders from $0.70 to $0.30 per contract. The
Exchange is proposing to increase the discount fee for Professionals,
Firms and Broker-Dealers from $0.30 to $0.35 per contract when
transacting electronic Complex Orders, resulting in a higher effective
fee. Despite the increase in the discount fee, the Exchange believes
that this discount will continue to incentivize Professionals, Firms
and Broker-Dealers to transact electronic Complex Order volume. The
Exchange believes that the proposed discount fee, although higher, will
continue to incentivize Professionals, Broker-Dealers and Firms to send
order flow to the Exchange.
    Currently, Specialists and Market Makers are subject to a ``Monthly
Market Maker Cap'' of $500,000 for: (i) Electronic and floor Option
Transaction Charges; and (ii) QCC Transaction Fees (as defined in
Exchange Rule 1080(o) and Floor QCC Orders, as defined in 1064(e)). The
trading activity of separate Specialist and Market Maker member
organizations are 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 \21\ are excluded from the
Monthly Market Maker Cap. Specialists 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 are currently assessed fees per contract as follows: $0.00 per
contract Fee for Adding Liquidity in Penny Pilot Options; $0.17 per
contract Fee for Removing Liquidity in Penny Pilot Options; $0.17 per
contract in Non-Penny Pilot Options; and $0.17 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'').
---------------------------------------------------------------------------

    \21\ See descriptions of these strategies in Section II of the
Pricing Schedule.
---------------------------------------------------------------------------

    The Exchange proposes to increase the Fee for Adding Liquidity in
Penny Pilot Options, when a Specialist or Market Maker is on the
contra-side of an electronically-delivered and executed Customer order,
excluding responses to a PIXL auction, and has reached the Monthly
Market Maker Cap, from $0.00 to $0.05 per contract. The Exchange also
proposes to make it clear that transactions which execute against an
order for which the Exchange broadcast an order exposure alert will be
subject to the existing fee of $0.17 per contract in a non-Complex
electronic auction.\22\ This rule change should add greater clarity to
the Pricing Schedule.\23\
---------------------------------------------------------------------------

    \22\ The $0.17 per contract fee that exists today is not
changed, and the proposal in respect of the fee is only for
electronic auction.
    \23\ The Exchange broadcasts orders on the Phlx Book by issuing
order exposure alerts to all Phlx XL II participants and market
participants that subscribe to certain data feeds. See Securities
Exchange Act Release Nos. 68517 (December 21, 2012), 77 FR 77134
(December 31, 2012) (SR-Phlx-2012-136) (notice of filing and
immediate effectiveness relating to distribution of auction
messages); and 68593 [sic] (January 31, 2013), 78 FR 8633 (February
6, 2013) (SR-Phlx-2013-06) (notice of filing and immediate
effectiveness to clarify when an order is adding or removing
liquidity and discussing order alerts). The Exchange notes that
there is currently an exposure alert provision in the Pricing
Schedule, albeit for fees and rebates regarding SPY (Section I).
---------------------------------------------------------------------------

Section IV, Part A--PIXL Pricing
    Currently, PIXL pricing for Initiating Orders is located in
subsection IV, Part A (Other Transaction Fees) of the Pricing Schedule.
Today, the Initiating Order Fee is $0.07 per contract or $0.05 per
contract if Customer Rebate Program Threshold Volume defined in Section
B is greater than 100,000 contracts per day in a month. The Exchange
proposes, as discussed below, to continue to assess the $0.07
Initiating Order Fee. The Exchange proposes, where the member or member
organization qualifies for the Tier 4 or 5 Customer Rebate in Section
B, to asses [sic] a $0.05 Simple PIXL Order Fee; and to indicate that
where the member or member organization qualifies for the Tier 4 or 5
Customer Rebate in Section B it will assess a $0.03 Complex PIXL Order
Fee. The Exchange also proposes to amend the qualifier for the
discounted fees.
    With respect to the qualifier, today, for an Initiating Order there
is a fee of $0.07 per contract or $0.05 per contract if the Customer
Rebate Program Threshold Volume defined in Section B is greater than
100,000 contracts per day in a month.\24\ The Initiating Order Fee for
non-Customers, including Professionals, Firms, Broker-Dealers,
Specialists and Market Makers, that have orders contra to a Customer
PIXL Order is reduced to $0.00 if the Customer PIXL Order is greater
than 399 contracts. The Exchange proposes to continue to assess an
Initiating Order Fee of $0.07 per contract, but proposes, where the
member or member organization qualifies for the Tier 4 or 5 Customer
Rebate in Section B, to instead assess an Initiating Order Fee of $0.05
per contract for Simple PIXL Orders and a new lower Initiating Order
Fee of $0.03 per contract for Complex PIXL Orders. The Exchange also
proposes to amend the qualifier to receive the $0.07 [sic] per contract
Initiating Order Fee to require a member to qualify for the Tier 4 or 5
Customer Rebate in Section B of the Pricing Schedule, instead of
today's requirement that a member's Customer Rebate Program Threshold
Volume, as defined in Section B of the Pricing Schedule, must be
greater than 100,000 contracts per day in a month.\25\ Tier 4 and 5 of
the Customer Rebate Schedule in Section B provides the highest relative
rebates in the five tier Customer Rebate Program, in particular where
the percentage thresholds of national customer volume in multiply-
listed equity and ETF Options classes, excluding SPY Options (monthly),
are also the highest. In making these proposals, the Exchange continues
to incentivize members to execute Customer liquidity on the Exchange.
---------------------------------------------------------------------------

    \24\ Any member or member organization under Common Ownership
with another member or member organization that qualifies for a
Customer Rebate Tier discount in Section B receives the PIXL
Initiating Order discount of $0.05 per contract.
    \25\ Moreover, any member or member organization under Common
Ownership with another member or member organization that qualifies
for a Customer Rebate Tier 4 or 5 rebate in Section B will receive
the PIXL Initiating Order discount as described in Section IV of the
Pricing Schedule.
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes that its proposal to amend the Pricing
Schedule is consistent with Section 6(b) of the Act \26\ in general,
and furthers the objectives of Section 6(b)(4) and (b)(5) of the Act
\27\ in particular, in that it provides for the equitable allocation of
reasonable dues, fees and other charges among members and issuers and
other persons using any facility or system which Phlx operates or
controls, and is not designed to permit unfair discrimination between
market participants to whom the Exchange's fees and rebates are
applicable.
---------------------------------------------------------------------------

    \26\ 15 U.S.C. 78f(b).
    \27\ 15 U.S.C. 78f(b)(4), (5).
---------------------------------------------------------------------------

Section B--Customer Rebates
    The Exchange believes that capping rebates on electronic Customer
PIXL Simple Orders at 4,000 contracts per order for Category A or 4,000
contracts per order leg for Customer Complex PIXL Orders for Category B
is reasonable because it will, with the cap, allow the Exchange to
continue to attract Customer liquidity to the Exchange. Customer orders
bring valuable liquidity to the market which liquidity benefits other
market participants. Customer liquidity benefits all market
participants by providing more trading opportunities, which attracts
Specialists and Market Makers. 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. Additionally, the Chicago Board Options Exchange
Incorporated (``CBOE'') similarly caps AIM transactions at 1,000
contracts.\28\
---------------------------------------------------------------------------

    \28\ See CBOE's Fees Schedule. Credits on Customer orders
executed electronically in AIM are capped at 1,000 contracts per
order for simple executions and 1,000 contracts per leg for complex
executions.
---------------------------------------------------------------------------

    The Exchange believes that capping rebates on electronic Customer
PIXL Simple Orders at 4,000 contracts per order for Category A or 4,000
contracts per order leg for Complex PIXL Orders for Category B is
equitable and not unfairly discriminatory because these amendments to
Category A and Category B apply uniformly to all market participants to
whom Category A and Category B apply.
    The Exchange believes also that it is reasonable to no longer offer
a $0.17 per contract rebate for Customer Complex PIXL Orders that
execute against a Complex PIXL Initiating Order because the Exchange
believes this rebate incentive is no longer necessary for this
particular service to increase order flow to the Exchange.
    The Exchange's proposal to no longer offer a $0.17 per contract
rebate for Customer Complex PIXL Orders that execute against a Complex
PIXL Initiating is equitable and not unfairly discriminatory because
the Exchange

will not pay such a rebate to any market participant.
Section II--Multiply Listed Options
    The Exchange believes that increasing the assessment for Firms
executing electronic Simple Orders in certain Penny Options from $0.25
to $0.27 per contract is reasonable because the Exchange would continue
to offer a discount to Firms which will continue to attract liquidity.
This benefits all market participants by providing more trading
opportunities, which attracts Specialists and Market Makers. 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. In
addition, this fee is consistent with fees associated with Miami
International Securities Exchange LLC (``MIAX'').\29\ Despite the
increase from $0.25 to $0.27 per contract, the Exchange believes that
Firms will continue to be incentivized to send volume to the Exchange.
---------------------------------------------------------------------------

    \29\ See MIAX's Fee Schedule. MIAX assesses firms a $0.27 per
contract fee for transactions in Penny classes. This fee is assessed
to an EEM that enters an order that is executed for an account
identified by the EEM for clearing in the OCC ``Firm'' range.
---------------------------------------------------------------------------

    The Exchange believes that increasing the assessment for Firms
executing electronic Simple Orders, and thereby offering a smaller
discount, in certain Penny Options \30\ from $0.25 to $0.27 per
contract is equitable and not unfairly discriminatory because it
applies uniformly to all Firms. Further, the proposed amendment will
continue to allow the Exchange to incentivize Firms to send electronic
Simple Orders in these symbols to the Exchange and because pricing by
symbol is a common practice on many U.S. options exchanges \31\ as a
means to incentive order flow to be sent to an exchange for execution.
The Exchange believes it is reasonable to continue to use a pricing
reduction to provide additional opportunities for members to increase
their participation in the market. The Exchange's fees will be
competitive with fees at other options markets. Although the Exchange
will still be assessing Firms more than Customers (which do not pay the
Option Transaction Charge in Penny Pilot or in non-Penny Pilot
options), Customer order flow enhances liquidity on the Exchange for
the benefit of all market participants and benefits all market
participants by providing more trading opportunities, which attracts
Specialists and Market Makers. 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. Although Firms will still be charged more for
Penny Pilot Options than Specialists and Market Makers who are charged
$0.22, Specialists and Market Makers have obligations to the market and
regulatory requirements, which normally do not apply to other market
participants.\32\ They have obligations to make continuous markets,
engage in a course of dealings reasonably calculated to contribute to
the maintenance of a fair and orderly market, and not make bids or
offers or enter into transactions that are inconsistent with a course
of dealings. Finally, as proposed, Firms will be charged only $0.27 in
these particular Penny Pilot Option symbols, which is less than the
Professional and Broker-Dealer charge of $0.48 (for Penny Pilot
Options). Moreover, the proposed differential does not misalign
pricing, in that Firms already benefit from certain pricing advantages
that Broker-Dealers do not also enjoy (for example, the Firm Monthly
Fee Cap).\33\ The proposed fee reduction that will apply to Firms but
not to Broker-Dealers is equitable and not unfairly discriminatory for
the same reasons that the Firm Monthly Fee Cap which applies to Firms
and not to Broker-Dealers is equitable and not unfairly discriminatory.
The fee reduction proposed herein, like the Monthly Firm Fee Cap,
provides an incentive for Firms to transact order flow on the Exchange,
which order flow brings increased liquidity to the Exchange for the
benefit of all Exchange participants. To the extent the purpose of the
proposed Firm fee reduction is achieved, all the Exchange's market
participants, including Broker-Dealers, should benefit from the
improved market liquidity. Further, competitive forces are influencing
the price reduction in these symbols for Firm orders.
---------------------------------------------------------------------------

    \30\ All of the symbols, AAPL, BAC, EEM, FB, FXI, IWM, QQQ,
TWTR, VXX and XLF, are currently Penny Pilot Options. This fee
discount is only available on these symbols and therefore not
available for Non-Penny Pilot Options.
    \31\ See, e.g., the International Securities Exchange LLC
(``ISE'') Schedule of Fees.
    \32\ See Rule 1014 titled ``Obligations and Restrictions
Applicable to Specialists and Registered Options Traders.''
    \33\ Firms are subject to a maximum fee of $75,000 (``Monthly
Firm Fee Cap''). Firm Floor Option Transaction Charges and QCC
Transaction Fees, in the aggregate, for one billing month may not
exceed the Monthly Firm Fee Cap per member organization when such
members are trading in their own proprietary account. All dividend,
merger, and short stock interest strategy executions (as defined in
Section II of the Pricing Schedule) are excluded from the Monthly
Firm Fee Cap. Reversal and conversion, jelly roll and box spread
strategy executions (as defined in Section II) are included in the
Monthly Firm Fee Cap. QCC Transaction Fees are included in the
calculation of the Monthly Firm Fee Cap. See Section II of the
Pricing Schedule.
---------------------------------------------------------------------------

    The Exchange believes it is reasonable to increase the assessment
applicable to Professionals, Broker-Dealers and Firms that transact
Electronic Complex Orders from $0.30 to $0.35 per contract, thereby
reducing the discount, because this discount will continue to attract
liquidity and benefit all market participants by providing more trading
opportunities, which attracts Specialists and Market Makers. The
Exchange's fees will continue to remain competitive with fees at other
options markets.\34\ Today, a Professional, Firm and Broker-Dealer are
assessed the highest electronic Options Transaction Charges in Penny
Pilot Options of $0.48 per contract, as compared to other market
participants. Despite the fee increase, the proposal will allow the
Exchange to incentivize these market participants by offering the
opportunity to lower Options Transaction Charges as described herein.
---------------------------------------------------------------------------

    \34\ See the NASDAQ Options Market LLC's (``NOM'') pricing at
Chapter XV of NOM's Rulebook.
---------------------------------------------------------------------------

    The Exchange believes it is equitable and not unfairly
discriminatory to increase the assessment applicable to Professionals,
Broker-Dealers and Firms that transact Electronic Complex Orders from
$0.30 to $0.35 per contract because the Exchange will assess
Professionals, Broker-Dealers and Firms the same electronic Options
Transaction Charges in Penny Pilot Options. The Exchange does not
assess Customers an electronic Options Transaction Charge in Penny
Pilot Options because Customer order flow enhances liquidity on the
Exchange for the benefit of all market participants. Customer liquidity
benefits all market participants by providing more trading
opportunities, which attracts Specialists and Market Makers. 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.
Specialists and Market Makers are assessed lower electronic Options
Transaction Charges in Penny Pilot Options as compared to
Professionals, Broker-Dealers and Firms because they have obligations
to the market and regulatory requirements, which normally do not apply
to other market participants.\35\ They have obligations to make
continuous markets, engage in a course of dealings reasonably
calculated to contribute to

the maintenance of a fair and orderly market, and not make bids or
offers or enter into transactions that are inconsistent with a course
of dealings. The proposed differentiation as between Customers,
Specialists and Market Makers and other market participants recognizes
the differing contributions made to the liquidity and trading
environment on the Exchange by these market participants.
---------------------------------------------------------------------------

    \35\ See Rule 1014 titled ``Obligations and Restrictions
Applicable to Specialists and Registered Options Traders.''
---------------------------------------------------------------------------

    The Exchange believes that increasing the assessment from $0.00 to
$0.05 per contract rebate for Adding Liquidity in Penny Pilot Options
is reasonable when Specialists or Market Makers are on the contra-side
of an electronically-delivered and executed Customer order, excluding
responses to a PIXL auction; and have reached the Monthly Market Maker
Cap. This is because Specialists and Market Makers will continue to pay
a lower fee as compared to other market participants and should be
incentivized to continue to add liquidity.
    The Exchange believes that increasing the assessment from $0.00 to
$0.05 per contract rebate for Adding Liquidity in Penny Pilot Options
is equitable and not unfairly discriminatory when Specialists or Market
Makers are on the contra-side of an electronically-delivered and
executed Customer order, excluding responses to a PIXL auction; and
have reached the Monthly Market Maker Cap. This is because Specialists
and Market Makers are assessed lower electronic order fees as compared
to Professionals, Broker-Dealers and Firms because they have
obligations to the market and regulatory requirements, which normally
do not apply to other market participants.\36\
---------------------------------------------------------------------------

    \36\ Id.
---------------------------------------------------------------------------

    The Exchange believes that clarifying that transactions which
execute against an order for which the Exchange broadcast an order
exposure alert in an electronic auction is also subject to the $0.17
per contract fee is reasonable, equitable and not unfairly
discriminatory because the Exchange is not proposing to amend the
manner in which the fee is applied, but rather provide additional
clarity to market participants that responses to an order exposure
alert shall be treated by the Exchange in a similar manner as other
auctions for purposes of applying this fee.
Section IV, Part A--PIXL Pricing
    Today, the Exchange assesses an Initiating Order Fee of $0.07 per
contract or $0.05 per contract for Simple PIXL Orders. The Exchange
believes that its proposal to adopt an alternative of $0.03 per
contract for Complex PIXL Orders (with the qualifier that a Customer
must qualify for the Tier 4 or 5 Customer Rebate in Section B of the
Pricing Schedule) is reasonable. This is because the Exchange believes
this additional incentive will further incentivize members to send
price improving seeking orders to PIXL as well as bring additional
liquidity to the Exchange in an effort to earn the Initiating Order
discount. Amending the qualifier from 100,000 contracts to qualifying
for a Tier 4 and Tier 5 Customer rebate is reasonable because this
simply establishes a different metric that requires members that desire
to earn the discounted PIXL pricing to send additional Customer order
flow to the Exchange with the new qualifier. The Exchange notes that in
order to remain competitive, the Exchange must implement fees and
rebates that are competitive with pricing at other options exchanges
that offer a similar auction opportunity. The PIXL electronic auction
represents an increasingly important and crucial segment of options
trading. The goal is creating and increasing incentives to attract
orders to the Exchange that will, in turn, benefit all market
participants through increased liquidity at the Exchange. The proposal
is designed to continue to incentivize market participants to send
liquidity to the Exchange. The Exchange believes that in addition to
currently assessing an Initiating Order of $0.07 per contractor [sic]
today, its proposal to adopt an alternative fee of $0.03 per contract
for Complex PIXL Orders (with the qualifier that a Customer must
qualify for the Tier 4 or 5 Customer Rebate in Section B of the Pricing
Schedule), and a $0.05 per contract for Simple PIXL Orders (with the
qualifier that a Customer must qualify for the Tier 4 or 5 Customer
Rebate in Section B of the Pricing Schedule), is equitable and not
unfairly discriminatory. The volume discount will be applied uniformly
to all according to liquidity brought to the Exchange by non-Customers.
The Exchange would offer all market participants, other than Customers
who are not assessed an Initiating Order Fee, an incentive to transact
large sized orders in PIXL. The Exchange believes that the proposal
will continue to attract liquidity, which benefits market participants
and provides the opportunity for increased order interaction on the
Exchange.
    The Exchange desires to incentivize members and member
organizations, through the Exchange's rebate and fee structure, to
select Phlx as a venue for bringing liquidity and trading by offering
competitive pricing. Such competitive, differentiated pricing exists
today on other options exchanges. The Exchange's goal is creating and
increasing incentives to attract orders to the Exchange that will, in
turn, benefit all market participants through increased liquidity at
the Exchange.

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. The Customer Rebate Program
amendments in Section B of the Pricing Schedule do not create an undue
burden on competition because the caps applicable to PIXL Orders will
apply uniformly to all market participants. The Exchange's proposal to
increase the assessment for Firms executing electronic Simple Orders in
certain Penny Options from $0.25 to $0.27 per contract does not place
an undue burden on competition, rather this reduction will continue to
attract liquidity which benefits all market participants by providing
more trading opportunities, which attracts Specialists and Market
Makers. In addition, this fee is consistent with fees assessed by
MIAX.\37\
---------------------------------------------------------------------------

    \37\ See MIAX's Fee Schedule. MIAX assesses firms a $0.27 per
contract fee for transactions in Penny classes. This fee is assessed
to an EEM that enters an order that is executed for an account
identified by the EEM for clearing in the OCC ``Firm'' range.
---------------------------------------------------------------------------

    The Exchange believes it is reasonable to increase the assessment
applicable to Professionals, Broker-Dealers and Firms that transact
Electronic Complex Orders from $0.30 to $0.35 per contract, thereby
reducing the discount, because this discount will continue to attract
liquidity and benefit all market participants by providing more trading
opportunities, which attracts Specialists and Market Makers. The
Exchange's fees will continue to remain competitive with fees at other
options markets.\38\ Today, a Professional, Firm and Broker-Dealer are
assessed the highest electronic Options Transaction Charges in Penny
Pilot Options of $0.48 per contract, as compared to other market
participants. Despite the fee increase, the proposal will allow the
Exchange to incentivize market participants by offering the opportunity
to lower Options Transaction Charges as described herein.
---------------------------------------------------------------------------

    \38\ See the NOM pricing at Chapter XV of NOM's Rulebook.
---------------------------------------------------------------------------

    The Exchange believes its proposal to increase the assessment
applicable to Professionals, Broker-Dealers and Firms that transact
Electronic Complex Orders

from $0.30 to $0.35 per contract does not create an undue burden on
competition because the Exchange will continue to offer a discount to
these market participants that pay the highest Penny Pilot Options
transaction fees. The Exchange does not assess Customers an electronic
Options Transaction Charge in Penny Pilot Options because Customer
order flow enhances liquidity on the Exchange for the benefit of all
market participants. Customer liquidity benefits all market
participants by providing more trading opportunities, which attracts
Specialists and Market Makers. 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. Specialists and Market Makers are assessed lower
electronic Options Transaction Charges in Penny Pilot Options as
compared to Professionals, Broker-Dealers and Firms because they have
obligations to the market and regulatory requirements, which normally
do not apply to other market participants.\39\
---------------------------------------------------------------------------

    \39\ See Rule 1014 titled ``Obligations and Restrictions
Applicable to Specialists and Registered Options Traders.''
---------------------------------------------------------------------------

    The Exchange's proposal to increase the fee assessment from $0.00
to $0.05 per contract rebate for Adding Liquidity in Penny Pilot
Options when Specialists or Market Makers are on the contra-side of an
electronically-delivered and executed Customer order, excluding
responses to a PIXL auction, and have reached the Monthly Market Maker
Cap, is reasonable. This is because Specialists and Market Makers do
not create an undue burden on competition because market makers have
obligations to the market and regulatory requirements, which normally
do not apply to other market participants.\40\
---------------------------------------------------------------------------

    \40\ Id.
---------------------------------------------------------------------------

    The Exchange's proposal to clarify that transactions which execute
against an order for which the Exchange broadcast an order exposure
alert in an electronic auction does not create an undue burden on
competition. This amendment will bring additional clarity to the fees.
    The Exchange believes that the proposed new volume discount for
PIXL Fees creates additional opportunity for incentivizing
Professionals, Firms, Broker-Dealers, Specialists and Market Makers to
bring additional liquidity to the market. The Exchange believes that
effectively assessing lower fees or paying rebates when a market
participant brings a certain amount of Customer orders creates
competition among market participants to remove liquidity from the Phlx
Book. This competition does not create an undue burden on competition
but rather offers all market participants the opportunity to receive
the benefit of the pricing when transacting options. Also, providing an
ability to earn greater discounts incentivizes order flow into the
auction.
    The Exchange operates in a highly competitive market, comprised of
twelve exchanges, in which market participants can easily and readily
direct order flow to competing venues if they deem fee levels at a
particular venue to be excessive or rebates to be inadequate.
Accordingly, the fees that are assessed and the rebates paid by the
Exchange, as described in the proposal, are influenced by these robust
market forces and therefore must remain competitive with fees charged
and rebates paid by other venues and therefore must continue to be
reasonable and equitably allocated to those members that opt to direct
orders to the Exchange rather than competing venues.
    The proposed fees are designed to ensure a fair and reasonable use
of Exchange resources by allowing the Exchange to recoup costs while
continuing to attract liquidity and offer connectivity at competitive
rates to Exchange members and member organizations.

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.\41\ At any time within 60 days of the
filing of the proposed rule change, the Commission summarily may
temporarily suspend such rule change if it appears to the Commission
that such action is necessary or appropriate in the public interest,
for the protection of investors, or otherwise in furtherance of the
purposes of the Act. If the Commission takes such action, the
Commission shall institute proceedings to determine whether the
proposed rule should be approved or disapproved.
---------------------------------------------------------------------------

    \41\ 15 U.S.C. 78s(b)(3)(A)(ii).
---------------------------------------------------------------------------

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-Phlx-2015-21 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-Phlx-2015-21. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street NE.,
Washington, DC 20549 on official business days between the hours of 10
a.m. and 3 p.m. Copies of such filing also will be available for
inspection and copying at the principal office of the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-Phlx-2015-21, and should be
submitted on or before April 6, 2015.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\42\
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    \42\ 17 CFR 200.30-3(a)(12).
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Brent J. Fields,
Secretary.
[FR Doc. 2015-05857 Filed 3-13-15; 8:45 am]
 BILLING CODE 8011-01-P