[Federal Register Volume 77, Number 47 (Friday, March 9, 2012)]
[Notices]
[Pages 14456-14458]
[FR Doc No: 2012-5736]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-66515; File No. SR-NASDAQ-2012-033]

Self-Regulatory Organizations; The NASDAQ Stock Market LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change
Relating to Fees and Rebates in Penny Pilot Options and Non-Penny Pilot
Options

March 5, 2012.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on February 29, 2012, The NASDAQ Stock Market LLC (``NASDAQ'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I, II,
and III below, which Items have been prepared by NASDAQ. The Commission
is publishing this notice to solicit comments on the proposed rule
change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    NASDAQ proposes to modify pricing for NASDAQ members using the
NASDAQ Options Market (``NOM''), NASDAQ's facility for executing and
routing standardized equity and index options. Specifically, NASDAQ
proposes to amend Section 2 of Chapter XV of NOM Rules to increase
transaction fees for adding and removing liquidity in All Other Options
\3\ as well as the Customer Rebate to Add Liquidity in Penny Pilot
Options (``Penny Options'').
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    \3\ All Other Options refers to non-Penny Pilot options. The
Penny Pilot was established in March 2008 and in October 2009 was
expanded and extended through June 30, 2012. See Securities Exchange
Act Release Nos. 57579 (March 28, 2008), 73 FR 18587 (April 4,
2008)(SR-NASDAQ-2008-026)(notice of filing and immediate
effectiveness establishing Penny Pilot); 60874 (October 23, 2009),
74 FR 56682 (November 2, 2009)(SR-NASDAQ-2009-091)(notice of filing
and immediate effectiveness expanding and extending Penny Pilot);
60965 (November 9, 2009), 74 FR 59292 (November 17, 2009)(SR-NASDAQ-
2009-097)(notice of filing and immediate effectiveness adding
seventy-five classes to Penny Pilot); 61455 (February 1, 2010), 75
FR 6239 (February 8, 2010)(SR-NASDAQ-2010-013)(notice of filing and
immediate effectiveness adding seventy-five classes to Penny Pilot);
62029 (May 4, 2010), 75 FR 25895 (May 10, 2010) (SR-NASDAQ-2010-
053)(notice of filing and immediate effectiveness adding seventy-
five classes to Penny Pilot); and 65969 (December 15, 2011), 76 FR
79268 (December 21, 2011) (SR-NASDAQ-2011-169) (notice of filing and
immediate effectiveness extension and replacement of Penny Pilot).
See also NOM Rules, Chapter VI, Section 5.
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    While changes to the Fee Schedule pursuant to this proposal are
effective upon filing, the Exchange has designated these changes to be
operative on March 1, 2012.
    The text of the proposed rule change is available on the Exchange's
Web site at http://www.nasdaq.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. 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
    NASDAQ proposes to modify certain transaction fees and rebates in
Chapter XV, Sec. 2, entitled ``NASDAQ Options Market--Fees,'' in order
to attract and enhance participation in NOM and raise revenues.
    Specifically, the Exchange proposes to amend All Other Options
(non-Penny Options) rebates and fees. The Exchange proposes to increase
the Professional Fee for Adding Liquidity in All Other Options from
$0.20 to $0.30 per contract.\4\ The Exchange also proposes to increase
the Professional, Firm, Non-NOM Market Maker and NOM Market Maker Fees
for Removing Liquidity in All Other Options from $0.45 to $0.50 per
contract.\5\ The Exchange believes that increasing the Professional Fee
for Adding Liquidity in All Other Options and the Professional, Firm,
Non-NOM Market Maker and NOM Market Maker Fees for Removing Liquidity
in All Other Options will help raise revenues.
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    \4\ The Exchange is not proposing to amend the Customer, Firm,
Non-NOM Market Maker or NOM Market Maker Fees for Adding Liquidity
in All Other Options.
    \5\ The Exchange is not proposing to amend the Customer Fee for
Removing Liquidity in All Other Options.
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    The Exchange is also proposing to amend the monthly volume tiers of
the Customer Rebate to Add Liquidity in Penny Options to further
incentivize NOM Participants to route Customer orders to the Exchange.
Currently, there are five tiers of the Customer Rebate to Add Liquidity
in Penny Options. Each tier requires the NOM participant to meet
certain criteria in order to qualify for the rebate. Specifically, the
Exchange is proposing to amend Tier 5, which states that if a
``Participant adds (1) Customer liquidity of 25,000 or more contracts
per day in a month, and (2) the Participant has certified for the
Investor Support Program set forth in Rule 7014; \6\ and (3) the
Participant executed at least one order on NASDAQ's equity market,''
the Participant will be paid a rebate of $0.40 per contract. The
Exchange is proposing to increase this Customer rebate to $0.41 per
contract. The Exchange believes that further incentivizing NOM
Participants to send additional Customer orders to the Exchange will
benefit all market participants by adding liquidity to the market in
Penny Options.
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    \6\ For a detailed description of the Investor Support Program
or ``ISP,'' see Securities Exchange Act Release No. 63270 (November
8, 2010), 75 FR 69489 (November 12, 2010) (SR-NASDAQ-2010-141) (the
``ISP Filing''). See also Securities Exchange Act Release Nos. 63414
(December 2, 2010), 75 FR 76505 (December 8, 2010) (SR-NASDAQ-2010-
153); and 63628 (January 3, 2011), 76 FR 1201 (January 7, 2011) (SR-
NASDAQ-2010-154). In order to qualify for an ISP credit, a
Participant would need to transact a certain amount of displayed
liquidity through an ISP-designated port which results in an
increase in the overall liquidity that the member provides to NASDAQ
measured as a proportion of the consolidated share volume traded by
all market participants across all trading venues. To this end, a
member's ``Baseline Participation Ratio'' is determined by measuring
the number of shares in liquidity-providing orders entered by the
member (through any NASDAQ port) and executed on NASDAQ and dividing
this number by the consolidated (across all trading venues) share
volume traded in a given month. To determine whether a member added
liquidity to NASDAQ in a given month, NASDAQ would perform the same
calculation on a monthly basis for the then-current month and
compare the resulting ratio to the Baseline Participation Ratio.
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2. Statutory Basis
    NASDAQ believes that the proposed rule changes are consistent with
the provisions of Section 6 of the Act,\7\ in general, and with Section
6(b)(4) of the Act,\8\ 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 NASDAQ operates or controls.
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    \7\ 15 U.S.C. 78f.
    \8\ 15 U.S.C. 78f(b)(4).
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    The Exchange believes that its proposal to increase the
Professional Fee for Adding Liquidity in All Other Options to $0.30 per
contract is reasonable, equitable and not unfairly discriminatory,
because, as compared to Firms and Non-NOM Market Makers, a Professional
would continue to be assessed a lower Fee for Adding Liquidity. In
addition, the new fee is the same fee assessed today for a NOM Market
Maker for adding liquidity. The Exchange believes that Professionals
engage in trading activity similar to that conducted by market makers.
For example, Professionals join bids and offers on the Exchange and
thus compete for incoming order flow; Professionals do so in direct
competition with the Exchange's market makers. Also, Professionals have
access to more information than a Customer and therefore should
continue to be assessed a higher rate than a Customer.
    The Exchange believes that its proposal to increase the
Professional Fee for Removing Liquidity in All Other Options to $0.50
per contract is reasonable, equitable and not unfairly discriminatory
because Professionals would be assessed a fee that is less favorable
than a Customer but equivalent to market markers because it has been
established that Professionals have access to more information than a
Customer.
    In addition, the Exchange believes that its proposal to increase
the Firm and Non-NOM Market Maker Fees for Removing Liquidity in All
Other Options to $0.50 per contract is reasonable because the Firm and
Non-NOM Market Maker fees are within the range of fees assessed by
other exchanges. NYSE Arca, Inc. (``NYSE Arca'') assesses Firms and
Broker-Dealers a $0.50 per contract fee for electronic orders.\9\
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    \9\ See NYSE Arca's Fee Schedule.
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    The Exchange also believes that its proposal to increase the
Professional, Firm, Non-NOM Market Maker and NOM Market Maker Fees for
Removing Liquidity in All Other Options to $0.50 per contract is
reasonable because the proposed Fees for Removing Liquidity are less
than the average fees paid by market makers on other exchanges when
factoring in payment for order flow.\10\ In addition, the Exchange
believes that its proposal to increase the Professional, Firm, Non-NOM
Market Maker and NOM Market Maker Fees for Removing Liquidity in All
Other Options to $0.50 per contract is equitable and not unfairly
discriminatory because the Exchange is proposing to uniformly increase
the fees applicable to all market participants except Customers.\11\ A
lower Customer Fee for Removing Liquidity benefits all market
participants by incentivizing NOM Participants to transact a greater
number of Customer orders, which results in increased liquidity.
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    \10\ NOM does not have a payment for order flow program.
    \11\ Customers are assessed a $0.45 per contract Fee for
Removing Liquidity in All Other Options.
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    The Exchange believes that the increased Customer rebate for market
participants that add Customer liquidity of 25,000 or more contracts
per day in a month, certify for the ISP and execute at least one order
on NASDAQ's equity market is reasonable, because it will continue to
incentivize NOM

Participants to transact additional Customer orders and encourage
participants in the Exchange's equity markets to also participate in
the Exchange's options market.
    The Exchange believes that the increased Customer rebate for market
participants that add Customer liquidity of 25,000 or more contracts
per day in a month, certify for the ISP and execute at least one order
on NASDAQ's equity market is equitable and not unfairly discriminatory,
because the increased rebate is intended to encourage increased
activity in both NOM and in the ISP of the NASDAQ equity market. The
goal of the ISP is to incentivize members \12\ to provide liquidity
from individual equity investors to the NASDAQ Market Center. The
increased rebate would encourage firms that certify pursuant to Rule
7014 to increase the amount of Customer order liquidity to NOM. The
addition of such liquidity, either through the ISP or through increased
Customer order flow, would benefit all Exchange members that
participate in those markets.
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    \12\ The Commission has expressed its concern that a significant
percentage of the orders of individual investors are executed in the
over-the-counter (``OTC'') market, that is, not on exchange markets;
and that a significant percentage of the orders of institutional
investors are executed in dark pools. See Securities Exchange Act
Release No. 61358 (January 14, 2010), 75 FR 3594 (January 21, 2010)
(Concept Release on Equity Market Structure, ``Concept Release'').
In the Concept Release, the Commission has recognized the strong
policy preference under the Act in favor of price transparency and
displayed markets. The Commission published the Concept Release to
invite public comment on a wide range of market structure issues,
including high frequency trading and un-displayed, or ``dark,''
liquidity. See also Mary L. Schapiro, Strengthening Our Equity
Market Structure (Speech at the Economic Club of New York, Sept. 7,
2010) (``Schapiro Speech,'' available on the Commission Web site)
(comments of Commission Chairman on what she viewed as a troubling
trend of reduced participation in the equity markets by individual
investors, and that nearly 30 percent of volume in U.S.-listed
equities is executed in venues that do not display their liquidity
or make it generally available to the public).
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    The Exchange operates in a highly competitive market comprised of
nine U.S. options exchanges in which sophisticated and knowledgeable
market participants can and do send order flow to competing exchanges
if they deem fee levels at a particular exchange to be excessive or
rebate opportunities to be inadequate. The Exchange believes that the
proposed fee and rebate scheme are competitive and similar to other
fees, rebates and tier opportunities in place on other exchanges. The
Exchange believes that this competitive marketplace materially impacts
the fees and rebates present on the Exchange today and substantially
influences the proposal set forth above.

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.

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.\13\ At any time within 60 days of the
filing of the proposed rule change, the Commission summarily may
temporarily suspend such rule change if it appears to the Commission
that such action is necessary or appropriate in the public interest,
for the protection of investors, or otherwise in furtherance of the
purposes of the Act. If the Commission takes such action, the
Commission shall institute proceedings to determine whether the
proposed rule should be approved or disapproved.
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    \13\ 15 U.S.C. 78s(b)(3)(A)(ii).
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IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml ); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-NASDAQ-2012-033 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NASDAQ-2012-033. 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 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-NASDAQ-2012-033 and should
be submitted on or before March 30, 2012.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\14\
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    \14\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-5736 Filed 3-8-12; 8:45 am]
BILLING CODE 8011-01-P


% Worker exposure 2 weeks, 5 days/week exposure, 30 days no exposure
% From Occup_Soil Inc for PBPK.xlsx, Applicator Rochelle rate, Cole Crops
% January 19, 2016
% Cecilia Tan

% Setting model parameters
use human_parameters_MRP
QPC = 31; 	% to get QALV = 8.3 L/min @BW = 69 kg
use preg_female_parameters
BWSW=1;	%Set BW to a fixed value
BWST=69;	%Set BW to 69kg
PREG=0;	%Not pregnant
DZONE = 1;	%Turn dermal exposure on
KDIS = 0.0;	%daily dissipation
TSTOP=1392;	%Simulation time in hours

% Dermal exposure
SAF=1;	 	% Fraction of skin in contact with chlorpyrifos.
FAD=1;     	% Fraction of dose available to be absorbed. Values of <1 could be used if pesticide is encapsulated.
DERM =5.91;		% dose in ug/kg
D3=5;  %DAYS/WEEK
P2=8; %HRS/DAY
S2=0 ;%OFFSET FROM 0 START TIME (EG IF YOU WANT TO MODEL FROM MIDNIGHT, BUT DOSE AT 8 AM)
%W2=28; %28 day exposure
W2=14; %14 day exposure

% Inhalation exposure
CONCMGM=0.000863; % Inhalation concentration mg/m3. Value is largest value reported in monitoring data.
D3IN=5;  %DAYS/WEEK
P2IN=8; %HRS/DAY
S2IN=0 ;%OFFSET FROM 0 START TIME (EG IF YOU WANT TO MODEL FROM MIDNIGHT, BUT DOSE AT 8 AM)
%W2IN=28; %28 day exposure
W2IN=14; %14 day exposure

prepare @clear@all
start @NoCallback
simall = [_time _rbcce _urinetcpy _cv*350.6];	%conc unit = ug/L

%save simall @file='applicator_spray_cole_rochelle_01192016' @format=ascii
save simall @file='applicator_spray_cole_rochelle_01212016' @format=ascii


[Federal Register Volume 84, Number 77 (Monday, April 22, 2019)]
[Notices]
[Pages 16668-16669]
[FR Doc No: 2019-08009]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Project No. 2376-051]

Eagle Creek Reusens Hydro, LLC; Notice of Intent To File License
Application, Filing of Pre-Application Document, and Approving Use of
the Traditional Licensing Process

    a. Type of Application: Notice of Intent to File License
Application and Request to Use the Traditional Licensing Process.

    b. Project No.: 2376-051.
    c. Date filed: February 28, 2019.
    d. Submitted by: Eagle Creek Reusens Hydro, LLC (Reusens Hydro).
    e. Name of Project: Reusens Hydroelectric Project.
    f. Location: Located on the James River in Bedford and Amherst
Counties, Virginia. The project does not occupy any federal lands.
    g. Filed Pursuant to: 18 CFR 5.3 of the Commission's regulations.
    h. Potential Applicant Contact: Michael Scarzello, Director, Eagle
Creek Renewable Energy, LLC, 116 North State Street, PO Box 167,
Neshkoro, WI 54960-0167, Phone:<PHONE_NUMBER>, Email:
[email protected].
    i. FERC Contact: Laurie Bauer, Phone:<PHONE_NUMBER>, Email:
[email protected].
    j. Reusens Hydro filed its request to use the Traditional Licensing
Process on February 28, 2019. Reusens Hydro provided public notice of
its request on February 28, 2019. In a letter dated April 16, 2019, the
Director of the Division of Hydropower Licensing approved Reusens
Hydro's request to use the Traditional Licensing Process.
    k. With this notice, we are initiating informal consultation with
the U.S. Fish and Wildlife Service and/or NOAA Fisheries under section
7 of the Endangered Species Act and the joint agency regulations
thereunder at 50 CFR, Part 402; and NOAA Fisheries under section 305(b)
of the Magnuson-Stevens Fishery Conservation and Management Act and
implementing regulations at 50 CFR 600.920. We are also initiating
consultation with the Virginia State Historic Preservation Officer, as
required by section 106, National Historic Preservation Act, and the
implementing regulations of the Advisory Council on Historic
Preservation at 36 CFR 800.2.
    l. With this notice, we are designating Reusens Hydro as the
Commission's non-federal representative for carrying out informal
consultation pursuant to section 7 of the Endangered Species Act and
section 305(b) of the Magnuson-Stevens Fishery Conservation and
Management Act; and consultation pursuant to section 106 of the
National Historic Preservation Act.
    m. Reusens Hydro filed a Pre-Application Document (PAD; including a
proposed process plan and schedule) with the Commission, pursuant to 18
CFR 5.6 of the Commission's regulations.
    n. A copy of the PAD is available for review at the Commission in
the Public Reference Room or may be viewed on the Commission's website
(http://www.ferc.gov), using the ``eLibrary'' link. Enter the docket
number, excluding the last three digits in the docket number field to
access the document. For assistance, contact FERC Online Support at
[email protected],<PHONE_NUMBER> (toll free), or (202) 502-
8659 (TTY). A copy is also available for inspection and reproduction at
the address in paragraph h.
    o. The licensee states its unequivocal intent to submit an
application for a new license for Project No. 2376. Pursuant to 18 CFR
16.8, 16.9, and 16.10 each application for a new license and any
competing license applications must be filed with the Commission at
least 24 months prior to the expiration of the existing license. All
applications for license for this project must be filed by February 28,
2022.
    p. Register online at http://www.ferc.gov/docs-filing/esubscription.asp to be notified via email of new filing and issuances
related to this or other pending projects. For assistance, contact FERC
Online Support.

    Dated: April 16, 2019.
Nathaniel J. Davis, Sr.,
Deputy Secretary.
[FR Doc. 2019-08009 Filed 4-19-19; 8:45 am]
 BILLING CODE 6717-01-P


[Federal Register Volume 77, Number 115 (Thursday, June 14, 2012)]
[Notices]
[Pages 35725-35727]
[FR Doc No: 2012-14534]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-67169; File No. SR-Phlx-2012-40]

Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Order
Approving Proposed Rule Change, as Modified by Amendment No. 1,
Relating to Quarterly Trading Requirements Applicable to Registered
Options Traders

June 8, 2012.

I. Introduction

    On March 26, 2012, NASDAQ OMX PHLX LLC (``Exchange'') filed with
the Securities and Exchange Commission (``Commission''), pursuant to
Section 19(b)(1) of the Securities Exchange Act of 1934 (``Act'') \1\
and Rule 19b-4 thereunder,\2\ a proposed rule change to change trading
requirements applicable to certain Registered Options Traders trading
electronically. The proposed rule change was published for comment in
the Federal Register on April 13, 2012.\3\ The Commission received no
comments on the proposal. On June 6, the Exchange filed Amendment No. 1
to the proposal.\4\ This order approves the proposal, as modified by
Amendment No. 1.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 66767 (April 6,
2012), 77 FR 22365. The Exchange subsequently extended the date for
Commission action to June 4, 2012, and then to June 8, 2012.
    \4\ The amendment is technical in nature, and is thus not
subject to notice and comment.
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II. Description

    The Exchange proposed to amend the trading requirements imposed on
certain Exchange market makers \5\ arising from their use of electronic
orders to trade on the Exchange.
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    \5\ The general term ``market makers'' on the Exchange includes
specialists and registered options traders (``ROTs''). An ROT is a
regular member of the Exchange located on the trading floor who has
received permission from the Exchange to trade in options for his
own account. See Exchange Rule 1014 (b)(i) and (ii). ROTs can be
Streaming Quote Traders (``SQTs''), Remote Streaming Quote Traders
(``RSQTs''), or non-Streaming Quote Trader ROTs (``non-SQT ROTs'')
which by definition are neither SQTs nor RSQTs. An ROT is a regular
member of the Exchange located on the trading floor who has received
permission from the Exchange to trade in options for his own
account. See Exchange Rule 1014 (b)(i) and (ii). An SQT is defined
as an ROT who has received permission from the Exchange to generate
and submit option quotations electronically in options to which such
SQT is assigned. See Exchange Rule 1014 (b)(ii)(A).
---------------------------------------------------------------------------

    First, the Exchange proposed to amend Exchange Rule 1014,
Commentary .13, which provides that within each quarter an ROT must
execute in person, and not through the use of orders, a specified
number of contracts, with such number to be determined from time to
time by the Exchange. Pursuant to Commentary .13, Options Floor
Procedure Advice B-3 requires that an ROT (other than an RSQT or a
Remote Specialist) trade in person, and not through the use of orders,
the greater of 1000 contracts or 50% of its contract volume on the
Exchange each quarter. The Exchange proposed to amend both Commentary
.13 and Options Floor Procedure Advice B-3 to permit non-SQT ROTs to
meet the in-person trading requirements set forth in those sections
using orders entered in person, for the same reasons that the Exchange
recently modified the 80% in-person test set forth in Commentary .01 to
Rule 1014.\6\
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    \6\ Prior to being amended, Commentary .01 required that in
order for an ROT (other than an RSQT or a Remote Specialist) to
receive specialist margin treatment for off-floor orders in any
calendar quarter, the ROT was required, among other things, to
execute the greater of 1,000 contracts or 80% of his total contracts
that quarter in person and not through the use of orders (the ``80%
in-person test''). The only way to participate in trades other than
through the use of orders is by quoting. In amending this provision,
the Exchange explained that the limitation on the use of orders to
satisfy the 80% in-person test with respect to non-SQT ROTs was
obsolete as, given the movement toward more electronic trading in
options, it had become difficult for such ROTs to comply with the
trading requirement without using orders. The Exchange observed that
non-SQT ROTs could only meet the 80% in person test by participating
in crowd trades which they cannot control in terms of frequency, and
proposed that the 80% in-person test be amended to permit non-SQT
ROTs to count orders entered in person to meet the requirement. See
Securities Exchange Act Release No. 65644 (October 27, 2011), 76 FR
67786 (November 2, 2011) (SR-Phlx-2011-123).
---------------------------------------------------------------------------

    The Exchange also proposed to amend Exchange Rule 1014(b)(ii)(E) to
eliminate the requirement that non-SQT ROTs who transact more than 20%
of their contract volume in an option electronically during any
calendar quarter submit two-sided electronic quotations (also known as
``streaming quotes'') in a designated percentage of series within
options in which such non-SQT ROT is assigned (the ``20% test''). The
Exchange stated that streaming quotes is burdensome to non-SQT ROTs,
who are generally not equipped to undertake this form of trading, and
could result in a significant

increase in fixed costs to these non-SQT ROTs. The Exchange stated that
continuing to require non-SQT ROTs that execute more than 20% of their
contract volume electronically to stream quotes would likely result in
those ROTs leaving the trading floor in that option. The Exchange
stated that price improvement, quality of execution, and especially
price discovery would suffer if these non-SQT ROTs were forced out of
open outcry market making. The Exchange therefore proposed to eliminate
the 20% test and its associated requirements as a vestige of the early
days of electronic trading.\7\ Instead, all non-SQT ROTs, regardless of
their volume of electronic transactions, would be subject to the
continuous open outcry quoting obligation that is currently only
applicable to those non-SQT ROTs that trade less than 20% of their
contract volume electronically. The Exchange represented that this
proposal would affect a relatively small number of non-SQT ROTs. The
Exchange also represented that this change would not detract from the
current electronic trading environment.
---------------------------------------------------------------------------

    \7\ In addition to deleting Exchange Rule 1014(b)(ii)(E)(2), the
Exchange proposed to delete introductory language from the beginning
of Exchange Rule 1014(b)(ii)(E) that would no longer be necessary.
The substantive provisions of Exchange Rule 1014(b)(ii)(E)(1)
governing non-SQT ROT obligations, as proposed to be renumbered and
amended, would continue to apply.
---------------------------------------------------------------------------

    The Exchange also proposed conforming changes to Exchange Rule
1014(b)(ii)(E)(1) to conform that provision to the recent amendment by
the Exchange of Rule 1014, Commentary .01. Specifically, the Exchange
proposed to delete Exchange Rule 1014(b)(ii)(E)(1)(c), which provides
that any volume transacted electronically will not count towards a non-
SQT ROT's 80% in-person test contained in Commentary .01 to Rule 1014.
As described above, recently amended Commentary .01 eliminated this
restriction and the Exchange stated that Exchange Rule
1014(b)(ii)(E)(1)(c) was no longer necessary.
    Finally, the Exchange proposed to eliminate a reference from Rule
1093(a), the Phlx XL Risk Monitor Mechanism, which refers to non-SQT
ROTs that are required to stream two-sided quotes electronically
pursuant to Rule 1014(b)(ii)(E). As described above, the Exchange
proposes to remove the requirement from Rule 1014(b)(ii)(E) that non-
SQT ROTs stream quotes electronically, and is making this conforming
change to Rule 1093(a).

III. Discussion and Commission Findings

    After careful review, the Commission finds that the proposed rule
change is consistent with the requirements of the Act and the rules and
regulations thereunder applicable to a national securities exchange \8\
and, in particular, the requirements of Section 6(b)(5) of the Act.\9\
Specifically, the Commission finds that the proposed rule change is
designed to promote just and equitable principles of trade, 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.
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    \8\ In approving this proposed rule change, the Commission has
considered the proposed rule's impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
    \9\ 15 U.S.C. 78f(b)(5).
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    The proposal eliminates the potentially burdensome requirements
that are triggered when a non-SQT ROT executes more than 20% of its
volume electronically, eliminates restrictions on non-SQT ROTs' use of
orders to meet various in-person trading requirements, and makes
clarifying and conforming changes to previously amended rule text.
    With respect to the elimination of the requirement that non-SQT
ROTs stream quotes electronically if they transact more than 20% of
their contract volume electronically, the Commission notes that the
Exchange recently amended its rules to require ROTs (other than RSQTs
and Remote Specialists) to execute a minimum of 1,000 contracts and 300
transactions on the Exchange each quarter.\10\ Given that a non-SQT ROT
cannot control the size or frequency of crowd trades, the non-SQT ROT
may have to use more electronic orders to meet this transaction
requirement, making it more likely that such non-SQT ROT would trigger
the 20% threshold for streaming quotes electronically. To the extent
that a non-SQT ROT that meets this threshold may be unable or unwilling
to invest the resources necessary for streaming quotes, and may exit
open-outcry market making in that option rather than stream quotes,
this may impact price improvement, quality of execution, and price
discovery on the Exchange. The Commission believes it is reasonable to
revise the quoting requirements for non-SQT ROTs accordingly to enable
such non-SQT ROTs to continue making markets in open outcry, to the
benefit of investors. In making this finding, the Commission notes that
this proposal would affect a relatively small number of non-SQT ROTs,
and that this change should not detract from the current electronic
trading environment. Moreover, to the extent that this rule change
imposes a continuous open outcry quoting obligation on all non-SQT
ROTs, regardless of electronic transaction volume, the Commission notes
that this proposal may potentially contribute to a more robust trading
crowd in a given option.\11\
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    \10\ See Securities Exchange Act Release No. 65644 (October 27,
2011), 76 FR 67786 (November 2, 2011) (SR-Phlx-2011-123).
Transactions executed in the trading crowd where the contra-side is
an ROT, however, do not count towards this requirement. See Rule
1014, Commentary .01.
    \11\ Currently, non-SQT ROTs that are under the 20% threshold
quote in open outcry, while non-SQT ROTs that exceed the 20%
threshold stream quotes electronically (or exit open-outcry market
making in that option). This proposed change would impose the
continuous open outcry obligation on all non-SQT ROTs.
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    Given that the Exchange is eliminating the continuous electronic
quoting obligations for non-SQT ROTs, the Commission finds that it is
consistent with the Act for the Exchange to eliminate a corresponding
reference to this requirement in Rule 1093(a).
    The Commission finds that the changes to Rule 1014, Commentary .13,
and to the Options Floor Procedure Advice B-3 to permit non-SQT ROTs to
use orders to meet in-person trading requirements are also consistent
with the Act. Those changes are consistent with the recent changes to
Commentary .01 to Rule 1014, which were approved by the Commission, to
permit the use of orders entered in person to count towards the 80% in-
person requirement of that Commentary.\12\ As the Exchange noted in
that rule change, non-SQT ROTs could have difficulty meeting the non-
SQT ROT in-person trading requirements without counting orders entered
electronically, given that non-SQT ROTs' ability to trade other than by
the use of orders has substantially diminished over the years with the
increasing prominence of electronic trading. The Commission finds that
rationale equally applicable here. Similarly, the deletion of Rule
1014(b)(ii)(E)(1)(c) is also consistent with those changes to
Commentary .01 to Rule 1014.
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    \12\ See Securities Exchange Act Release No. 65644 (October 27,
2011), 76 FR 67786 (November 2, 2011) (SR-Phlx-2011-123).
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    For the foregoing reasons, the Commission believes that the
proposed rule change is consistent with the Act.

IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\13\ that the

proposed rule change (SR-Phlx-2012-40), as modified by Amendment No.1,
be, and it hereby is, approved.
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    \13\ 15 U.S.C. 78s(b)(2).
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    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\14\
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    \14\ 17 CFR 200.30-3(a)(12).

Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-14534 Filed 6-13-12; 8:45 am]
BILLING CODE 8011-01-P