[Federal Register Volume 80, Number 86 (Tuesday, May 5, 2015)]
[Notices]
[Pages 25749-25755]
[FR Doc No: 2015-10403]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-74833; File No. SR-Phlx-2015-36]

Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change Relating to
the Phlx Permit Fee, Order Entry Port Fee, Clearing Trade Interface
Port Fee, and Active Specialized Quote Feed Port Fee

April 29, 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 April 20, 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 amend the Phlx Pricing Schedule (``Pricing
Schedule'') at Section VI pertaining to the Phlx Permit Fee and at
Section VII pertaining to the Order Entry Port Fee, the Clearing Trade
Interface (``CTI'') Port Fee, and the Active Specialized Quote Feed
(``SQF'') Port Fee.\3\ The Exchange also proposes technical changes to
the language of the Pricing Schedule.
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    \3\ References in the proposal are to the Exchange's Pricing
Schedule, unless otherwise noted.
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    While the changes proposed herein are effective upon filing, the
Exchange has designated the amendments become operative on May 1, 2015.
    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 Exchange proposes to amend the Exchange's Pricing Schedule at
Section VI pertaining to the Phlx Permit Fee and at Section VII
pertaining to the Order Entry Port Fee, the CTI Port Fee, and the
Active SQF Port Fee. The Exchange also proposes technical changes to
the language of the Pricing Schedule. The proposed changes are
discussed below.
Phlx Permit Fee--Section VI A. of the Pricing Schedule
    The Exchange currently has a Permit Fee for Phlx members, which is
$2,150 for Specialists \4\ and Market Makers \5\ and $2,150 for Floor
Brokers \6\ per month. The Exchange proposes to increase the Permit Fee
for Specialist and Market Makers, as well as for Floor Brokers, to
$2,300.\7\
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    \4\ A ``Specialist'' is an Exchange member who is registered as
an options specialist pursuant to Exchange Rule 1020(a).
    \5\ A ``Market Maker'' includes Registered Options Traders
(Exchange Rule 1014(b)(i) and (ii)), which includes Streaming Quote
Traders (Exchange Rule 1014(b)(ii)(A)) and Remote Streaming Quote
Traders (Exchange Rule 1014(b)(ii)(B)).
    \6\ A ``Floor Broker'' is defined in Exchange Rule 1060 as an
individual who is registered with the Exchange for the purpose,
while on the Options Floor, of accepting and handling options orders
received from members and member organizations.
    \7\ In addition, a member or member organization will pay an
additional Permit Fee for each sponsored options participant, which
fee will be the Permit Fee that is assessed to the member or member
organization sponsoring the options participant. See note 16 to
section VI A. of the Pricing Schedule.
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    Phlx Permit Fees for all other member and member organizations are
currently $4,000 in a given month, unless the member or member
organization or member organizations under Common Ownership \8\
executes at least 100 options in a Phlx house account that is assigned
to one of the member organizations in a given month, in which case the
Permit Fee will be $2,150 for that month. Commensurate with the
increased Permit Fees for Specialists, Market Makers, and Floor
Brokers, the Exchange proposes to increase to $2,300 the Permit Fee for
all other Common Ownership members or member organizations that execute
a large number of options on the Exchange.\9\
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    \8\ The term ``Common Ownership'' means members or member
organizations under 75% common ownership or control. See Preface to
Pricing Schedule.
    \9\ No change is proposed to Permit Fees for PSX only members
and member organizations. These fees would continue to be $4,000
unless the member or member organization averages at least 1,000
shares executed per day in a given month, in which case the Permit
Fee will be $0.00 in a given month. This volume will be calculated
by averaging the shares over a one month period. The Exchange
believes 1,000 shares per day in a given month is a reasonable level
given the lower volume of business transacted on PSX as compared to
other mature equities markets such as The NASDAQ Stock Market LLC.
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    The Exchange is seeking to recoup costs incurred from the
membership administration function while continuing to encourage
bringing options liquidity to the Exchange.
Order Entry Port Fee--Section VII B. of the Pricing Schedule
    The Exchange currently has an Order Entry Port Fee that is $600 per
month per mnemonic.\10\ The Exchange proposes to modestly increase the
Order Entry Port Fee to $650 per month per mnemonic.
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    \10\ Mnemonics are codes that identify member organization order
entry ports.
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    The Order Entry Port Fee is a connectivity fee related to routing
orders to the Exchange via an external order entry port. Phlx members
access the Exchange's network through order entry ports. A Phlx member
may have more than one order entry port. Today, the Exchange assesses
members an Order Entry Port Fee of $600 per month per mnemonic. The
Exchange proposes to increase the Order Entry Port Fee to $650 per
month per mnemonic. The current practice will continue whereby the
Order Entry Port Fee will be waived for mnemonics that are used
exclusively for Complex Orders \11\ where one of the components of the
Complex Order is the underlying security.\12\ In addition, the current
practice will continue whereby member organizations are not being
assessed an Order Entry Port Fee for additional ports acquired for only
ten business days for the purpose of transitioning technology.\13\
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    \11\ A Complex Order is any order involving the simultaneous
purchase and/or sale of two or more different options series in the
same underlying security, priced at a net debit or credit based on
the relative prices of the individual components, for the same
account, for the purpose of executing a particular investment
strategy. Furthermore, a Complex Order can also be a stock-option
order, which is an order to buy or sell a stated number of units of
an underlying stock or exchange-traded fund (``ETF'') coupled with
the purchase or sale of options contract(s). See Exchange Rule 1080,
Commentary .07(a)(i).
    \12\ See note 25 to section VII B. of the Pricing Schedule.
    \13\ Similarly, member organizations will continue to be
required to provide the Exchange with written notification of the
transition and all additional ports which were provided at no cost
will be removed at the end of the ten business days. See Order Entry
Port Fee in section VII B. of the Pricing Schedule.
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CTI Port Fees--Section VII B. of the Pricing Schedule
    The Exchange currently has a CTI Port Fee that is $600 per port per
month for each of the first 5 CTI ports, and $100 per port for each
port thereafter. The Exchange proposes to modestly increase the CTI
Port Fee from $600 to $650 and to continue to charge a smaller amount
for the subsequent ports in order to encourage use of CTI ports on the
Exchange.
    CTI offers real-time clearing trade updates. A real-time clearing
trade update is a message that is sent to a member after an execution
has occurred and contains trade details. The message containing the
trade details is also simultaneously sent to The Options Clearing
Corporation (``OCC''). The trade messages are routed to a member's
connection containing certain information. The administrative and
market event messages include, but are not limited to: System event
messages to communicate operational-related events; options directory
messages to relay basic option symbol and contract information for
options traded on the Exchange; complex strategy messages to relay
information for those strategies traded on the Exchange; trading action
messages to inform market participants when a specific option or
strategy is halted or released for trading on the Exchange; and an
indicator which distinguishes electronic and non-electronically
delivered orders. This information will be available to members on a
real-time basis.\14\
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    \14\ Other data that is available includes: (1) Options Auction
Notifications (e.g., opening imbalance, market exhaust, PIXL or
other information); (2) Options Symbol Directory Messages; (3)
System Event Messages (e.g., start of messages, start of system
hours, start of quoting, start of opening); (4) Complex Order
Strategy Auction Notifications (``COLA''); (5) Complex Order
Strategy messages; (6) Option Trading Action Messages (e.g., trading
halts, resumption of trading); and (7) Complex Strategy Trading
Action Message (e.g., trading halts, resumption of trading).
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    The Exchange assesses port fees for similar ports, namely the Order
Entry Ports, CTI Ports and Active SQF Ports,

discussed below. The Exchange desires to continue assessing the fees on
Phlx in order to recoup costs associated with these ports while
encouraging members to participate in the market.
Active SQF Port Fee--Section VII B. of the Pricing Schedule
    SQF is an interface that enables Specialists, Streaming Quote
Traders (``SQTs'') \15\ and Remote Streaming Quote Traders (``RSQTs'')
\16\ to connect and send quotes into Phlx XL.\17\ Active SQF ports are
ports that receive inbound quotes at any time within that month. Active
SQF Ports allow member organizations to access, information such as
execution reports, execution report messages, auction notifications,
and administrative data through a single feed.
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    \15\ An SQT is defined in Exchange Rule 1014(b)(ii)(A) as a
Registered Options Trader (``ROT'') who has received permission from
the Exchange to generate and submit option quotations electronically
in options to which such SQT is assigned.
    \16\ An RSQT is defined in Exchange Rule in 1014(b)(ii)(B) as an
ROT that is a member or member organization with no physical trading
floor presence who has received permission from the Exchange to
generate and submit option quotations electronically in options to
which such RSQT has been assigned. An RSQT may only submit such
quotations electronically from off the floor of the Exchange.
    \17\ See Securities Exchange Act Release No. 63034 (October 4,
2010), 75 FR 62441 (October 8, 2010) (SR-Phlx-2010-124).
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    Last year, as discussed below, the Exchange underwent a technology
refresh (``refresh'' or ``technology refresh''), which is completed.
During the technology refresh, Exchange members had to use old Active
SQF Ports and new Active SQF Ports as these were being developed,
tested, and implemented. Where the Exchange had been offering Active
SQF Ports in sets of four to accommodate the connections necessary to
access the match engine, as a result of the refresh (discussed below)
firms could use fewer ports for a connection.
    To help Exchange members through the refresh period, the Exchange
last year filed an immediately effective proposal regarding Active SQF
Port Fees (the ``prior SQF filing'').\18\ In the prior SQF filing, the
Exchange added language into Section VII B. of the Pricing Schedule to
help avoid things such as double charging during the refresh transition
period (``refresh accommodation language''). First, Section VII B. of
the Pricing Schedule currently states that Specialists and Market
Makers that are subject to the Active SQF Port Fee as of December 1,
2014 will be subject to an Active SQF Port Fee that reflects the
average of fees assessed to them for the months of August, September
and October 2014 (known as the ``Fixed Active SQF Port Fee''). This
Fixed Active SQF Port Fee will be assessed to these Specialists and
Market Makers from December 1, 2014 through March 31, 2015. Second,
Section VII B. of the Pricing Schedule currently states that
Specialists and Market Makers will not be assessed a fee for their use
of the new version of the Active SQF Port through March 31, 2015. And
third, a Specialist or Market Maker who was not subject to Fixed Active
SQF Port Fees prior to December 1, 2014 will be provided new ports and
assessed the above [sic] Active SQF Port Fees as of December 1, 2014.
These instances of the refresh accommodation language are no longer
needed (e.g., the timing has expired) and are therefore being deleted.
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    \18\ See Securities Exchange Act Release No. 73687 (November 25,
2014), 79 FR 71485 (December 2, 2014) (SR-Phlx-2014-73) (notice of
filing and immediate effectiveness regarding Active SQF Port Fee).
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    Currently, Section VII B. of the Pricing Schedule states that as of
April 1, 2015 all Specialists and Market Makers are subject to the
following tiered Active SQF Port Fee (``variable Active SQF Port
Fee''):

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                                                            Monthly fee
                Number of active SQF port                    per port
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1.......................................................          $2,500
2-6.....................................................           4,000
7 and over..............................................          15,000
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Instead of continuing implementation of the variable Active SQF Port
Fees that were put into place during the refresh, the Exchange proposes
to assess Specialists and Market Makers an Active SQF Port Fee of
$1,250 per port per month (``Active SQF Port Fee''). This Active SQF
Port Fee replaces the variable Active SQF Port Fee and is applicable to
all that would be assessed for the Active SQF Port.\19\ Thus, with the
proposal, the Active SQF Port Fee would be a set fee of $1,250 per port
per month, capped at $42,000.\20\
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    \19\ The Exchange notes that the variable Active SQF Fee could,
in fact, be more expensive that the proposed Active SQF Fee. For
example, where the fixed Active SQF Port Fee for one port per month
would be $1,250, the variable Active SQF Port Fee (as applicable to
Specialists and Market Makers) would be $2,500; and where the fixed
Active SQF Port Fee for 3 ports per month would be $3,750, the
variable Active SQF Port Fee would be $4,000 per port.
    \20\ Currently, per note 26 to Section VII of the Pricing
Schedule, the Active SQF Port Fee is capped at $42,000, but includes
language that the fee is capped at $41,000 per month through March
31, 2015 (``Active SQF Port Fee Cap''). The Exchange proposes to
delete the unnecessary language referring to March 31, 2015.
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    At the time that the variable Active SQF Port Fees were put into
current Section VII B. of the Pricing Schedule during the technology
refresh, four ports were needed to connect to the matching engine;
after the refresh, only one port is needed. As noted in the prior SQF
filing, the technology refresh was instituted last year in order that
the Exchange may provide an equal opportunity to Specialists and Market
Makers to access SQF data at a lower cost. The goal was to deploy
state-of-the-art hardware and software architecture for a more
efficient and robust infrastructure that would support the growing
needs of market participants. The refresh changed the previously-needed
multi-port connection to the matching engine to only one port. The
functionality did not change as a result of the concluded refresh. As
the Exchange had anticipated,\21\ Specialists and Market Makers
certainly benefitted from the efficiency of the service that would be
available to them as a result of the refresh. While Specialists and
Market Makers were required to make network and other technical changes
in order to connect to the Phlx system via SQF, the Exchange believes
that member costs declined overall as a result of the more efficient
connectivity offered by the refresh.\22\ During the technology refresh,
the Exchange provided Specialists and Market Makers with new SQF ports
for connectivity and functionality testing so that Specialists and
Market Makers could migrate from the old Active SQF Ports to the new
Active SQF Ports over a reasonable period of time.\23\ As discussed,
during the refresh period the Exchange implemented refresh
accommodation language and a variable Active SQF Port Fee. The refresh
is successfully completed and the Exchange is therefore deleting the
refresh accommodation language and the variable Active SQF Port Fee,
and proposing the above-described Active SQF Port Fee changes. The
Exchange believes, as discussed in more detail below, that the Active
SQF Port Fee changes, like the Order Entry Port Fee

and CTI Port Fee changes, are reasonable.\24\
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    \21\ See prior SQF filing.
    \22\ As discussed, the increased efficiency in connectivity did
not require the same infrastructure on the part of members to
connect to the Exchange; members have not need to have the same
level of connectivity after the conversion to the new ports per the
refresh, and this has provided an overall cost reduction.
    \23\ The Exchange migrated on a symbol by symbol basis thereby
requiring the use of both new and old Active SQF Ports for a period
of time. Post refresh only new ports are utilized.
    \24\ For example, just as the Exchange believes that it was
reasonable to allow Specialists and Market Makers to utilize new
ports at no cost for a period of time to transition their current
SQF ports to the new ports that were offered as a result of the
technology refresh, so the Exchange believes that it is reasonable
to delete such provisions when no longer needed.
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    In addition, the Exchange proposes some technical housekeeping
changes. First, the Exchange proposes to delete a bullet point in note
26 to Section VII B. of the Pricing Schedule, which is applicable to
the Active SQF Port Fee section; the bullet point is not necessary.
Second, the Exchange proposes to fix a typographical error by adding an
``l'' in the word ``wil'' in note 26.
    The Exchange proposes to amend the Phlx Permit Fee, Order Entry
Port Fee and CTI Port Fee. This proposal reflects a modest price
increase to members and member organizations while allowing the
Exchange to recoup a certain portion of costs associated with permits
and ports, namely the Order Entry Port and the CTI Port. The Exchange
proposes to also delete the variable Active SQF Port Fee that is
applicable to Specialists and Market Makers as of April 1, 2015, and
the refresh accommodation language that is no longer necessary. The
Exchange believes that the proposed changes are in conformity with the
Act.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent
with the provisions of Section 6 of the Act,\25\ in general, and with
Section 6(b)(4) and 6(b)(5) of the Act,\26\ in particular, in that it
provides for the equitable allocation of reasonable dues, fees and
other charges among members and issuers and other persons using any
facility or system which the Exchange operates or controls, and is not
designed to permit unfair discrimination between customers, issuers,
brokers, or dealers. The proposal regarding Phlx Permit Fees allows the
Exchange to recoup costs incurred from the membership administration
function. The proposals regarding the Order Entry Port Fee and CTI Port
Fee allow the Exchange to recoup costs associated with these ports
while encouraging members to participate in the market. The proposals
regarding deleting the variable Active SQF Port Fee and using the
proposed new Active SQF Port Fee instead,\27\ and deleting the refresh
accommodation language that is no longer necessary, are made while
continuing to encourage members to bring options liquidity to the
Exchange.
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    \25\ 15 U.S.C. 78f.
    \26\ 15 U.S.C. 78f(b)(4) and (5).
    \27\ The concept of a fixed fee for the Active SQF Port is not
novel. A fixed monthly fee was previously adopted, for example, in
connection with a specialist unit fee on Phlx. See Securities
Exchange Act Release No. 48459 (September 8, 2003), 68 FR 54034
(September 15, 2003) (SR-Phlx-2003-61) (notice of filing and
immediate effectiveness).
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Phlx Permit Fee
    The Exchange's proposal to amend Phlx Permit Fees is reasonable
because the Exchange is seeking to recoup costs that are incurred by
the Exchange.
    The Exchange believes it is reasonable to assess different market
participants different Permit Fees because each market participant has
a different business model and, as a result, pays various other fees to
the Exchange to maintain his or her business. Certain market
participants such as Floor Brokers, Specialists and Market Makers pay
other types of fees. For example, a Floor Broker requires space on the
Exchange's trading floor, and infrastructure to support floor
trading.\28\ A Specialist and Market Maker will similarly incur costs
for certain data feeds, remote specialist fees, RSQT Fees and SQF Port
Fees, amongst other charges.\29\ Taking into account the overall costs
incurred by Floor Brokers, Specialists and Market Makers to simply
access and conduct their business on the Exchange, it is reasonable to
assess these market participants a proposed Permit Fee of $2,300
(rather than $2,150) per month as compared to market participants other
than Floor Brokers, Specialists and Market Makers (``Other Market
Participants''). The Exchange believes that it is reasonable to assess
Other Market Participants a higher Permit Fee of $4,000 in a given
month unless they transact a certain volume on the Exchange because
these market participants do not incur the higher costs to conduct
their business as do Floor Brokers, Specialists and Market Makers. The
Exchange also believes that it is reasonable to provide Other Market
Participants an opportunity to lower Permit Fees from $4,000 to the
same proposed effective rate of $2,300 (rather than $2,150) if they
transact a certain volume on Phlx in a given month. The Exchange
believes this volume brings revenue to the Exchange, which in turn
benefits other market participants because they are able to interact
with that volume. The Exchange believes that the continued 100 options
threshold in a given month is an achievable hurdle for a majority of
options participants on Phlx today, who are capable of meeting this
threshold. Finally, assessing different Permit Fee rates to different
types of market participants is not novel among options markets.\30\
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    \28\ Floor Brokers are subject to a Floor Facility Fee in
Section VII of the Pricing Schedule.
    \29\ See Section VI and VII of the Pricing Schedule.
    \30\ The Chicago Board Options Exchange, Incorporated
(``CBOE''), the International Securities Exchange, LLC (``ISE'') and
Miami International Securities Exchange LLC (``MIAX'') assess
different Trading Permit Fees to different market participants. See
CBOE's Fees Schedule, ISE's Fee Schedule and MIAX's Fee Schedule.
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    The Exchange's proposal to amend Phlx Permit Fees is equitable and
not unfairly discriminatory for the reasons which follow. The Exchange
believes that continuing to assess Floor Brokers, Specialists and
Market Participants effectively the same proposed rate of $2,300
(rather than $2,150) for a Permit Fee recognizes the overall total fee
structure of these market participants on Phlx. As mentioned herein,
Floor Brokers, Specialists and Market Makers incur fees which are not
borne by other market participants.\31\ The Exchange believes that the
proposed fee structure recognizes the costs that are incurred by these
market participants in determining the Permit Fee for Floor Brokers,
Specialists and Market Makers. The Exchange believes that Floor
Brokers, Specialists and Market Makers serve an important function on
the Exchange and already pay a significant portion of the non-
transaction fees assessed by the Exchange today. Specialists and Market
Makers serve an important role on the Exchange with regard to order
interaction and they provide liquidity in the marketplace. Floor
Brokers are registered with the Exchange for the purpose, while on the
options floor, of accepting and executing options orders received from
members and member organizations.\32\ These market participants incur
greater costs as compared to Professionals, Firms and Broker-Dealers
because the type of business they conduct requires them to incur more
cost to access the Exchange as compared to others. Other Market
Participants (Professionals, Firms and Broker-Dealers) do not incur the
same fees as Floor Brokers, Specialists and Market Makers and
therefore, in order to allocate fees, the Exchange continues to assess
these Other Market Participants an increased fee of $4,000, unless they
are able to transact at least 100 options in a given month. The
Exchange believes that

assessing Other Market Participants the higher fee of $4,000 and
offering the opportunity to lower the Permit Fee by executing a certain
amount of volume is equitable and not unfairly discriminatory because
transacting volume on Phlx brings liquidity to the Exchange, which in
turn benefits other market participants. The Exchange believes that
Other Market Participant members, member organizations and those under
Common Ownership that add liquidity to the market place also bring
revenue to the Exchange by incurring transaction fees.
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    \31\ Floor Brokers require space on the Exchange's trading
floor, and infrastructure to support floor trading. Floor Brokers
are subject to a Floor Facility Fee in Section VII of the Pricing
Schedule. Specialists and Market Makers similarly incur costs for
certain data feeds, remote specialist fees, RSQT Fees and SQF Port
Fees amongst other charges. See, e.g., Sections VI and VII of the
Pricing Schedule.
    \32\ See Exchange Rule 1060.
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    The Exchange believes it is equitable and not unfairly
discriminatory to assess effectively the same proposed Permit Fee of
$2,300 (rather than $2,150) to Other Market Participants, equivalent to
the fee assessed on Floor Brokers, Specialists and Market Makers, in
any given month in which the Other Market Participants achieve the
requisite volume because of the liquidity and revenue they bring to
Phlx. The opportunity to lower Permit Fees affords Other Market
Participants the opportunity to lower their fees by offering a means to
benefit the Exchange by bringing liquidity to the marketplace.\33\
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    \33\ As discussed, the Exchange continuation to assess PSX only
members no Permit Fee provided they transact an average of at least
1,000 shares executed per day in a given month is reasonable because
the Exchange seeks to continue to attract market participants to the
PSX market by assessing no fee.
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CTI Port Fee and Order Entry Port Fee
    The Exchange's proposal to amend CTI Port Fees and Order Entry Port
Fees is reasonable because the Exchange is seeking to recoup costs that
are incurred by the Exchange.
    The Exchange believes that continuing to assess a CTI Port Fee on
the Exchange at a proposed $650 (rather that $600) per port per month
for each of the first 5 CTI ports, and $100 per port for each port
thereafter, is reasonable because it would allow the Exchange to recoup
costs associated with offering the CTI ports. The Exchange notes that
until recently it had a Real-Time Risk Management Fee,\34\ but this fee
was deleted in favor of using Port Fees.\35\ The Exchange has found
that the use of Port Fees is an effective way to recoup costs. This
proposal reflects a modest price increase to members and member
organizations while allowing the Exchange to recoup a certain portion
of costs associated with ports, namely the Order Entry Port and CTI
Port. Members and member organizations will be able to continue to
obtain real-time information via CTI and SQF as discussed.
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    \34\ The Real-Time Risk Management Fee was adopted well over a
decade ago for members receiving option trading information on-line
(i.e., electronically) from the Exchange. See Securities Exchange
Act Release No. 43719 (December 13, 2000), 65 FR 80975 (December 22,
2000) (SR-Phlx-00-97) (notice of filing and immediate
effectiveness).
    \35\ See Securities Exchange Act Release No. 74000 (January 6,
2015), 80 FR 1570 (January 12, 2015) (SR-Phlx-2014-83) (notice of
filing and immediate effectiveness).
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    As with other port fees in subsection Section VII B. of the Pricing
Schedule, the CTI Port Fees reflect a portion of the costs that the
Exchange bears with respect to offering and maintaining the CTI ports.
The CTI Port Fees are reasonable because they enable the Exchange to
offset, in part, its connectivity costs associated with making such
ports available, including costs based on gateway software and hardware
enhancements and resources dedicated to gateway development, quality
assurance, and support. The proposal to modestly increase the fees is
reasonable to continue to recoup costs while encouraging members to
connect to the Exchange.
    The Exchange believes that continuing to assess an Order Entry Port
Fee on the Exchange at a proposed $650 per port per mnemonic is,
similarly to the CTI Port Fee, reasonable because it would allow the
Exchange to recoup costs associated with offering the Order Entry
Ports. As noted, until recently the Exchange had a Real-Time Risk
Management Fee that was deleted in favor of using Port Fees, which the
Exchange has found is an effective way to recoup costs. This proposal
reflects a modest price increase while allowing the Exchange to recoup
a certain portion of costs associated with ports, namely the Order
Entry Port and CTI Port.\36\ Members and member organizations will be
able to continue to obtain real-time information via CTI and SQF.
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    \36\ As noted, the current practice will continue whereby the
Order Entry Port Fee will be waived for mnemonics that are used
exclusively for Complex Orders where one of the components of the
Complex Order is the underlying security. Similarly, member
organizations will continue to be required to provide the Exchange
with written notification of the transition and all additional ports
which were provided at no cost will be removed at the end of the ten
business days. See note 25 to section VII B. of the Pricing
Schedule.
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    The Exchange believes that the CTI Port Fees for the CTI ports at a
proposed $650 per port per month for each of the first 5 CTI ports, and
$100 per port for each port thereafter, is equitable and not unfairly
discriminatory because the Exchange will assess the same fees for all
CTI ports to all members.
    The Exchange believes that the Order Entry Fees for the Order Entry
Ports at a proposed $650 per month per mnemonic is similarly equitable
and not unfairly discriminatory because the Exchange will assess the
same fees for all Order Entry Ports to all members.
    As with other port fees in Section VII B. of the Pricing Schedule,
the CTI Port Fee and the Order Entry Port Fee reflect a portion of the
costs that the Exchange bears with respect to offering and maintaining
the ports; such fees allow the Exchange to keep pace with increasing
technology costs. These fees enable the Exchange to offset, in part,
its connectivity costs associated with making such ports available,
including costs based on gateway software and hardware enhancements.
Active SQF Port Fee
    The Exchange believes that it is reasonable to delete the variable
Active SQF Port Fees. The variable Active SQF Port Fees were, as
discussed, put into current Section VII B. of the Pricing Schedule
during the technology refresh of the Phlx trading system, which, among
other things, allowed the use of one port to connect to the match
engine as compared to a set of four ports. The functionality did not
change as a result of the refresh. The Exchange properly anticipated
that Specialists and Market Makers would benefit from the efficiency of
the service that will be available to them as a result of the
refresh.\37\ While Specialists and Market Makers were required to make
network and other technical changes in order to connect to the Phlx
system via SQF, the Exchange believes that members costs declined
overall as a result of the more efficient connectivity offered by the
refresh.\38\
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    \37\ See prior SQF filing.
    \38\ As noted, and as discussed in the prior SQF filing, the
increased efficiency in connectivity did not require the same
infrastructure on the part of members to connect to the Exchange;
members did not need to have the same level of connectivity after
the conversion to the new ports and this provided an overall cost
reduction.
---------------------------------------------------------------------------

    Currently, as of April 1, 2015, Specialists and Market Makers are
subject to a variable Active SQF Port Fee based on the number of active
ports per month as follows: $2,500 for 1 port, $4,000 for 2-6 ports and
$15,000 for 7 or more ports. The Exchange believes that it is
reasonable to delete the variable Active SQF Port Fee applicable to
Specialists and Market Makers, and replace it with the proposed $1,250
per port per month Active SQF Port Fee applicable to all.\39\ The
Exchange believes that it is reasonable to assess all firms the same
Active SQF Port Fee as opposed to a variable fee because, as

discussed, the variable Active SQF Port Fee could, in fact, be more
expensive.\40\
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    \39\ The Active SQF Port Fee is capped at $42,000.
    \40\ For example, where the fixed Active SQF Port Fee for one
port per month would be $1,250, the variable Active SQF Port Fee (as
applicable to Specialists and Market Makers) would be $2,500; and
where the fixed Active SQF Port Fee for 3 ports per month would be
$3,750, the variable Active SQF Port Fee would be $4,000 per port.
---------------------------------------------------------------------------

    The Exchange believes it is equitable and not unfairly
discriminatory to delete the variable Active SQF Port Fee, and replace
it with the proposed Active SQF Port Fee because all Specialists and
Market Makers would be subject to the same Active SQF Port Fee.
    Because of the technology refresh, the Exchange added refresh
accommodation language into Section VII B. of the Pricing Schedule to
avoid double charging and to enable firms to get through the refresh
transition period.\41\ Because the refresh is now completed and the
refresh accommodation language is no longer needed, the Exchange
believes that it is reasonable to delete the refresh accommodation
language. The Exchange believes that just as it was reasonable to allow
Specialists and Market Makers to utilize new ports at no cost for a
period of time to transition their current SQF ports to the new ports
that were offered as a result of the technology refresh, so it is
reasonable to delete such provisions when no longer needed. In order to
ease the transition during the refresh from the old SQF ports to new
SQF ports, Specialists and Market Makers were given an extended period
to test functionality and connectivity and resolve any issues that may
arise during the testing phase with the new ports. With the refresh
completed, and because of the time periods in the refresh accommodation
language as discussed, there is no longer any need for the language and
the Exchange believes that it is reasonable to delete it.
---------------------------------------------------------------------------

    \41\ The refresh accommodation language in Section VII B. of the
Pricing Schedule states that Specialists and Market Makers that are
subject to the Active SQF Port Fee as of December 1, 2014 will be
subject to an Active SQF Port Fee that reflects the average of fees
assessed to them for the months of August, September and October
2014. This Fixed Active SQF Port Fee will be assessed to these
Specialists and Market Makers from December 1, 2014 through March
31, 2015. Specialists and Market Makers will not be assessed a fee
for their use of the new version of the Active SQF Port through
March 31, 2015. In addition, a Specialist or Market Maker who was
not subject to Fixed Active SQF Port Fees prior to December 1, 2014
will be provided new ports and assessed the above Active SQF Port
Fees as of December 1, 2014. See also prior SQF filing.
---------------------------------------------------------------------------

    The Exchange believes that deletion of the refresh accommodation
language is equitable and not unfairly discriminatory because with the
deleted refresh accommodation language, the Exchange will assess all
current users of Active SQF Ports a fee based on the same criteria.
    Currently, per note 26 to Section VII of the Pricing Schedule, the
Active SQF Port Fee is capped at $42,000, but includes language that
the fee is capped at $41,000 per month through March 31, 2015. The
Exchange proposes to delete the unnecessary language referring to March
31, 2015. The Exchange believes that this is reasonable because the
$42,000 Active SQF Port Fee Cap is currently in effect and the Exchange
is just taking the unneeded language out the Active SQF Port Fee Cap
provision.
    The Exchange believes that deleting the unnecessary language
referring to March 31, 2015 is equitable and not unfairly
discriminatory because the Exchange is simply cleaning up the language
and will apply the Active SQF Port Fee Cap to all Specialists and
Market Makers uniformly.
    Finally, the Exchange proposes two technical housekeeping changes.
First, the Exchange proposes to delete a bullet point in note 26 to
Section VII of the Pricing Schedule, which is applicable to the Active
SQF Port Fee section; the bullet point is not necessary. Second, the
Exchange proposes to fix a typographical error by adding an ``l'' in
the word ``wil'' in note 26; the word is misspelled. The Exchange
believes that the changes are reasonable because they will delete
unneeded language and clarify it.
    The Exchange believes that the technical housekeeping changes are
equitable and not unfairly discriminatory because the Exchange will
apply them equally per the Pricing Schedule.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will
impose an undue burden on competition not necessary or appropriate in
furtherance of the purposes of the Act.
    The Exchange believes that offering Specialists and Market Makers
the opportunity to utilize certain Active SQF ports, during this
transition with XL, at no cost ensured that the transition was done
smoothly. Specialists and Market Makers continued to be assessed the
Active SQF Port Fees for current ports at a rate that is representative
of their typical usage. The Exchange allowed these market participants
to utilize new ports at no cost without limit. As discussed, the
Exchange used certain refresh accommodation language to help the
refresh go forward. The Exchange believes that deletion of these
unneeded provisions will not impose an undue burden on competition.
Similarly, the modest proposed increases in fees and establishing that
all are liable for the proposed Active SQF Port Fee will not impose an
undue burden on competition. Moreover, deleting the unnecessary
language that the Active SQF Port Fee is capped at $41,000 per month
through March 31, 2015 will not impose an undue burden on competition
because the Active SQF Port Fee is already capped at $42,000 per month
and the Exchange is merely taking out the unneeded language; moreover,
the Active SQF Port Fee Cap would be applied uniformly to all market
participants. Finally, the CTI Port Fee and the Order Entry Port Fee
reflect a portion of the costs that the Exchange bears with respect to
offering and maintaining the Order Entry Ports. Such fees allow the
Exchange to keep pace with increasing technology costs, and will not
impose an undue burden on competition because the fees would be applied
uniformly to all market participants.
    The Exchange operates in a highly competitive market, comprised of
twelve options 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 above-described fees that are assessed by the Exchange
(as also the rebates paid by the Exchange) 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.

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

    No written comments were either solicited or received.

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

    The foregoing rule change has become effective pursuant to Section
19(b)(3)(A)(ii) of the Act.\42\ 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.
---------------------------------------------------------------------------

    \42\ 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-2015-36 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-Phlx-2015-36. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street NE.,
Washington, DC 20549 on official business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of such filing also will be available
for inspection and copying at the principal office of the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-Phlx-2015-36, and should be
submitted on or before May 26, 2015.

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

    \43\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Brent J. Fields,
Secretary.
[FR Doc. 2015-10403 Filed 5-4-15; 8:45 am]
 BILLING CODE 8011-01-P


[Federal Register Volume 82, Number 166 (Tuesday, August 29, 2017)]
[Notices]
[Pages 41075-41077]
[FR Doc No: 2017-18243]

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-81470; File No. SR-NYSEAMER-2017-05]

Self-Regulatory Organizations; NYSE American LLC; Notice of
Filing of Proposed Rule Change To Amend the Complimentary Products and
Services Available to Certain Eligible New Listings Pursuant to Section
146 of the NYSE American Company Guide

August 23, 2017.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (the ``Act''),\2\ and Rule 19b-4 thereunder,\3\ notice is hereby
given that, on August 11, 2017, NYSE American LLC (the ``Exchange'' or
``NYSE American'') filed with the Securities and Exchange Commission
(the ``Commission'') the

proposed rule change as described in Items I, II, and III below, which
Items have been prepared by the self-regulatory organization. The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange proposes to amend Section 146 of the NYSE American
Company Guide (the ``Company Guide'') to provide that companies
initially listed on or after October 1, 2017 will not be eligible to
receive corporate governance tools under the Exchange's services
offering. The proposed rule change is available on the Exchange's Web
site at www.nyse.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 self-regulatory organization
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 those 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 parts of such statements.

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

1. Purpose
    The Exchange proposes to amend Section 146 of the Company Guide to
provide that companies initially listed on or after October 1, 2017
will not be eligible to receive corporate governance tools under the
Exchange's services offering.
    As set forth in Section 146, the Exchange currently provides
Eligible New Listings \4\ with complimentary Web-hosting products and
services (with a commercial value of approximately $16,000 annually),
web-casting services (with a commercial value of approximately $6,500
annually), whistleblower hotline services (with a commercial value of
approximately $4,000 annually), and news distribution products and
services (with a commercial value of approximately $20,000 annually)
and corporate governance tools (with a commercial value of
approximately $15,000 annually) for a period of 24 calendar months. The
Exchange's experience has been that companies that qualify as Eligible
New Listings have generally not been interested in availing themselves
of the corporate governance tools available as part of the services
offering. As such the Exchange has decided to discontinue the corporate
governance tool portion of its service offering for companies that list
on or after October 1, 2017. Any company that is listed prior to
October 1, 2017 will continue to be able to access corporate governance
tools to the extent that they are eligible to do so under Section 146
as currently in effect.
---------------------------------------------------------------------------

    \4\ For the purposes of Section 146, the term ``Eligible New
Listing'' means (i) any U.S. company that lists common stock on the
Exchange for the first time and any non-U.S. company that lists an
equity security on the Exchange under Section 101 or 110 of the
Company Guide for the first time, regardless of whether such U.S. or
non-U.S. company conducts an offering, (ii) any U.S. or non-U.S.
company that transfers its listing of common stock or equity
securities, respectively, to the Exchange from another national
securities exchange and (iii) any U.S. or non-U.S. company emerging
from a bankruptcy, spinoff (where a company lists new shares in the
absence of a public offering), and carve-out (where a company carves
out a business line or division, which then conducts a separate
initial public offering).
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent
with Section 6(b) \5\ of the Act, in general, and furthers the
objectives of Section 6(b)(5) of the Act,\6\ in particular in that it
is designed to promote just and equitable principles of trade, to
foster cooperation and coordination with persons engaged in regulating,
clearing, settling, processing information with respect to, and
facilitating transactions in securities, to remove impediments to and
perfect the mechanism of a free and open market and a national market
system, and, in general, to protect investors and the public interest
and is not designed to permit unfair discrimination between customers,
issuers, brokers, or dealers. The Exchange believes that the proposed
amendment is not unfairly discriminatory, as all companies listed on or
after October 1, 2017 will continue to be eligible to avail themselves
of the same services offering with the exception of the corporate
governance tools offering which will be discontinued. It is not
unfairly discriminatory to continue to offer corporate governance tools
to companies listed prior to October 1, 2017, as that benefit was part
of the services offering that was available at the time of those
companies' initial listing and may have had some influence over their
listing decisions.
---------------------------------------------------------------------------

    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange believes that the proposed amendments to the Company
Guide do not impose any burden on competition that is not necessary or
appropriate in furtherance of the purposes of the Act. The proposed
rule change does not impose any burden on competition, as all companies
whose initial listing occurs on or after October 1, 2017 will be
eligible for an identical services offering with the exception of the
discontinued corporate governance tools.

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

    No written comments were solicited or received with respect to the
proposed rule change.

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

    Within 45 days of the date of publication of this notice in the
Federal Register or up to 90 days (i) as the Commission may designate
if it finds such longer period to be appropriate and publishes its
reasons for so finding or (ii) as to which the self-regulatory
organization consents, the Commission will:
    (A) By order approve or disapprove the proposed rule change, or
    (B) institute proceedings to determine whether the proposed rule
change should be disapproved.

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-NYSEAMER-2017-05 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-NYSEAMER-2017-05. 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 N.,
Washington, DC 20549, on official business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the filing also will be available
for inspection and copying at the principal office of the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-NYSEAMER-2017-05, and should
be submitted on or before September 19, 2017.
---------------------------------------------------------------------------

    \7\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\7\
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-18243 Filed 8-28-17; 8:45 am]
 BILLING CODE 8011-01-P


MEMORANDUM

DATE:		November 21, 2014

TO:		Carbon Power Plan for Existing Power Plants; Docket Id: OAR - 2013-0602

FROM:	Region 7, EPA

SUBJECT:	August 5, 2014, Meeting Regarding Proposed Carbon Power Plan for Existing Power Plants
--------------------------------------------------------------------------------

SUMMARY

      A conference call was held between EPA and the attendees listed below on August 5, 2014 to discuss the proposed Carbon Power Plan for Existing Power Plants. The majority of the discussion centered on how goals were established for the state of Nebraska. The Carbon Power Plan for Existing Power Plants was proposed on June 2, 2014.

ATTENDEES

EPA Headquarters:
Erich Eschmann
Matt Clouse
Joe Bryson
Chris Sherry
David Soloman
Nate Topham
Jim Catencardwell
Lora Strine
Erica Wilson
Beth Murray

EPA Region 7:
Mark A. Smith
Ward Burns
Larry Gonzalez

Nebraska Department of Environmental Quality:
Shelly Schneider
Katie Gutierrez
Brian Kozisek