Browse: Departments Dates Agencies
DOCUMENT ID: [Release No. 34-58049; File No. SR-Phlx-2008-46]
SUBJECT CATEGORY: Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to Fees for Options on the Full-Size Nasdaq 100 Index and Options on the Mini Nasdaq 100 Index
DOCUMENT SUMMARY: June 27, 2008.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') \1\ and Rule 19b4 thereunder,\2\ notice is hereby given that
on June 13, 2008, the Philadelphia Stock Exchange, Inc. (``Phlx'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I and
II below, which Items have been substantially prepared by the Exchange.
The Exchange has designated this proposal as one establishing or
changing a due, fee, or other charge applicable only to a member,
pursuant to Section 19(b)(3)(A)(ii) of the Act \3\ and Rule 19b4(f)(2)
thereunder,\4\ which renders the proposal effective upon filing with
the Commission. 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\ 17 CFR 240.19b4.
\3\ 15 U.S.C. 78s(b)(3)(A)(ii).
\4\ 17 CFR 240.19b4(f)(2).
I. SelfRegulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change
Phlx proposes to assess equity option charges, as opposed to index
option charges, on: (1) Options on the full value of the Nasdaq 100
Index \5\ traded under the symbol NDX (the ``Fullsize Nasdaq 100
Index''); and (2) options on the onetenth of the value of the Nasdaq
100 Index traded under the symbol MNX (the ``Mini Nasdaq 100 Index'')
(collectively referred to herein as the ``Nasdaq Index Products''). \6\
Therefore, the Exchange proposes to charge the Nasdaq Index Products,
which are index options, in a similar manner that it charges for equity
options, except that there will be a fee assessed for customer
transactions.\7\ Specifically, for purposes of the option transaction
charge, the Exchange proposes to adopt a specific customer option
transaction charge of $0.12 per contract side customer execution transaction fee on the Nasdaq Index Products.
\5\ NASDAQ[supreg], NASDAQ100[supreg] and NASDAQ100
Index[supreg] are registered trademarks of The NASDAQ OMX Group,
Inc. (which with its affiliates are the ``Corporations'') and are
licensed for use by the Philadelphia Stock Exchange, Inc. in
connection with the trading of options products based on the NASDAQ
100 Index[supreg]. The options products have not been passed on by
the Corporations as to their legality or suitability. The options
products are not issued, endorsed, sold, or promoted by the
Corporations. The Corporations make no warranties and bear no liability with respect to the options products.
\6\ See Securities Exchange Act Release No. 57936 (June 6,
2008), 73 FR 33481 (June 12, 2008) (SRPhlx200836) (proposed rule
change relating to the listing and trading of options on the Nasdaq Index Products).
\7\ Phlx has clarified that the index option transaction charge
for customer executions, which is currently $0.40 per contract,
applies to brokerdealer transactions. Pursuant to this proposed
rule change, Phlx has stated that brokerdealer transactions in MNX
and MDX index options will be assessed the equity option transaction
charges as set forth on the Exchange's current Summary of Equity
Option and RUT and RMN Charges fee schedule. Pursuant to that fee
schedule, the brokerdealer equity option transaction charges are
either $0.45 per contract for AUTOMdelivered orders or $0.25 per
contract for nonAUTOMdelivered orders. Email communication to
Heather Seidel, Assistant Director, Division of Trading and Markets
(``Division''), Commission, and Leah Mesfin, Special Counsel,
Division, Commission, from Cynthia Hoekstra, Vice President, Phlx, on June 24, 2008.
In addition, the Exchange proposes to adopt a $0.10 per contract side license fee on ``firmrelated'' comparison and transaction charges for the Nasdaq Index Products.\8\ This license fee will be imposed only after the Exchange's $60,000 firmrelated equity option and index option comparison and transaction charge cap is reached.\9\ \8\ Specifically, ``firmrelated'' charges include equity option firm/proprietary comparison charges, equity option firm/proprietary transaction charges, equity option firm/proprietary facilitation transaction charges, index option firm (proprietary and customer executions) comparison charges, index option firm/proprietary transaction charges, and index option firm/proprietary facilitation transaction charges (collectively the ``firmrelated charges''). \9\ Currently, the Exchange imposes a per contract side license fee for equity option and index option ``firm'' transactions on certain licensed products (collectively ``licensed products'') after the $60,000 cap per member organization on all ``firmrelated'' equity option and index option comparison and transaction charges combined is reached Therefore, when a member organization exceeds the $60,000 cap (comprised of firmrelated charges), the member organization is charged $60,000, plus the applicable license fee per contract side for any contracts in licensed products (if any) over those that were included in reaching the $60,000 cap. Thus, such firmrelated charges in the aggregate for one billing month may not exceed $60,000 per month per member organization. For a complete list of the licensed products that are assessed a license fee per contract side after the $60,000 cap is reached, see $60,000 ``Firm Related'' Equity Option and Index Option Cap on the Exchange's fee schedule.
In addition, the Exchange proposes to amend its Summary of Equity
Option and RUT and RMN Charges to reflect that a $0.10 license fee on
the Nasdaq Index Products will be assessed in connection with the
Exchange's current cap on Registered Options Traders (``ROT'')
comparison charges and ROT and specialist transaction charges \10\ on
nonAUTOM delivered equity option contracts \11\ when an ROT or
specialist executes over 14,000 contracts calculated on a daily basis.
These terms apply only to transactions when an ROT or specialist is the
contraparty to a customer order.\12\ Therefore, after the 14,000 non
AUTOM delivered contract level is reached in a specific option,
additional comparison and transaction charges are not assessed on
subsequent option contracts in excess of 14,000 that are executed on
that day in that specific option when the ROT or specialist is the
contraparty to a customer order. Even when the 14,000 cap is reached,
the license fee will be imposed on applicable ROTs and specialists for
equity option transactions on those licensed products that carry a license fee.\13\
\10\ The Exchange does not currently assess a comparison charge
on specialist transactions. Therefore, the cap applies to ROT
comparison and transaction charges combined and separately to specialist transaction charges.
\11\ For purposes of this fee, orders delivered via the Floor
Broker Management System are deemed to be nonAUTOM delivered orders. See Phlx Rule 1063.
\12\ See Securities Exchange Act Release No. 54659 (October 27,
2006), 71 FR 64603 (November 2, 2006) (SRPhlx200667) (capping ROT
comparison charges and ROT and specialist transaction charges when certain requirements are met).
\13\ For a complete list of the licensed products that are
currently assessed a license fee per contract side after the 14,000
equity option contract is reached, see $60,000 ``Firm Related''
Equity Option and Index Option Cap on the Exchange's fee schedule.
This proposal is schedule to become effective for transactions settling on or after June 16, 2008.
The text of the proposed rule change is available at the Exchange's
principal office, on the Exchange's Web site at http://www.phlx.com/
regulatory/reg_rulefilings.aspx, and at the Commission's Public Reference Room.
II. SelfRegulatory 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. SelfRegulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change
The purpose of this proposal is to assess equity option charges,
including payment for order flow charges, on the Nasdaq Index Products
that are competitive with charges assessed on these same products by other exchanges.\14\
\14\ See e.g., Securities Exchange Act Release Nos. 57052
(December 27, 2007), 73 FR 523 (January 3, 2008) (SRAmex2007140)
(assessing license fee of $0.16 per contract side for NDX and MNX
options); 51351 (March 9, 2005), 70 FR 12917 (March 16, 2005)
(relating to transaction fees and license fees for the Nasdaq Index
Products); 57128 (January 10, 2008), 73 FR 2969 (January 16, 2008)
(SRISE200802) (assessing license fee of $0.16 per contract for
trading in options on NDX and MNX); 52983 (December 20, 2005), 70 FR 76475 (December 27, 2005) (SRISE2005047) (adopting a flat
execution fee for public customer orders in ``Premium Products'');
52493 (September 22, 2005), 70 FR 56941 (September 29, 2005) (SR
Amex2005087) (certain transaction fees applicable to the Nasdaq
Index Products); and 55193 (January 30, 2007), 72 FR 5476 (February
6, 2007) (SRCBOE2006111) (amending certain public customer fees for other indexes, ETFs and HOLDRs).
The purpose of assessing the Nasdaq Index Products a license fee of
$0.10 per contract side after reaching the $60,000 cap and the 14,000
cap as described herein is to help defray licensing costs associated
with the trading of these products, while still capping member
organizations' fees enough to attract volume from other exchanges.\15\
The caps operate this way in order to offer an incentive for additional
volume without leaving the Exchange with significant outofpocket
costs. This proposal is scheduled to become effective for transactions settling on or after June 16, 2008.
\15\ Id.
The Exchange believes that its proposal to amend its schedule of
fees is consistent with Section 6(b) of the Act \16\ in general, and
furthers the objectives of Section 6(b)(4) of the Act \17\ in
particular, in that it is an equitable allocation of reasonable fees
and other charges among Exchange members, as all the applicable equity
option charges will be assessed on the Nasdaq Index Products.
Additionally, assessing customer transaction and license fees on the
Nasdaq Index Products, as described herein, should help the Exchange
remain competitive by attracting additional order flow to the Exchange. \16\ 15 U.S.C. 78f(b).
\17\ 15 U.S.C. 78f(b)(4).
B. SelfRegulatory 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. SelfRegulatory 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
Because the foregoing rule change is establishing or changing a
due, fee, or other charge applicable only to a member, it has become
effective pursuant to Section 19(b)(3)(A)(ii) of the Act \18\ and Rule
19b4(f)(2) thereunder.\19\ At any time within 60 days of the filing of
such proposed rule change the Commission may summarily abrogate 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. \18\ 15 U.S.C. 78s(b)(3)(A)(ii).
\19\ 17 CFR 240.19b4(f)(2).
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
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\20\
Florence E. Harmon,
Acting Secretary.
\20\ 17 CFR 200.303(a)(12).
[FR Doc. E815103 Filed 7208; 8:45 am]
BILLING CODE 801001P
SUMMARY: Philadelphia Stock Exchange, Inc.,
DOCUMENT BODY 2: June 27, 2008.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') \1\ and Rule 19b4 thereunder,\2\ notice is hereby given that
on June 13, 2008, the Philadelphia Stock Exchange, Inc. (``Phlx'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I and
II below, which Items have been substantially prepared by the Exchange.
The Exchange has designated this proposal as one establishing or
changing a due, fee, or other charge applicable only to a member,
pursuant to Section 19(b)(3)(A)(ii) of the Act \3\ and Rule 19b4(f)(2)
thereunder,\4\ which renders the proposal effective upon filing with
the Commission. 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\ 17 CFR 240.19b4.
\3\ 15 U.S.C. 78s(b)(3)(A)(ii).
\4\ 17 CFR 240.19b4(f)(2).
I. SelfRegulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change
Phlx proposes to assess equity option charges, as opposed to index
option charges, on: (1) Options on the full value of the Nasdaq 100
Index \5\ traded under the symbol NDX (the ``Fullsize Nasdaq 100
Index''); and (2) options on the onetenth of the value of the Nasdaq
100 Index traded under the symbol MNX (the ``Mini Nasdaq 100 Index'')
(collectively referred to herein as the ``Nasdaq Index Products''). \6\
Therefore, the Exchange proposes to charge the Nasdaq Index Products,
which are index options, in a similar manner that it charges for equity
options, except that there will be a fee assessed for customer
transactions.\7\ Specifically, for purposes of the option transaction
charge, the Exchange proposes to adopt a specific customer option
transaction charge of $0.12 per contract side customer execution transaction fee on the Nasdaq Index Products.
\5\ NASDAQ[supreg], NASDAQ100[supreg] and NASDAQ100
Index[supreg] are registered trademarks of The NASDAQ OMX Group,
Inc. (which with its affiliates are the ``Corporations'') and are
licensed for use by the Philadelphia Stock Exchange, Inc. in
connection with the trading of options products based on the NASDAQ
100 Index[supreg]. The options products have not been passed on by
the Corporations as to their legality or suitability. The options
products are not issued, endorsed, sold, or promoted by the
Corporations. The Corporations make no warranties and bear no liability with respect to the options products.
\6\ See Securities Exchange Act Release No. 57936 (June 6,
2008), 73 FR 33481 (June 12, 2008) (SRPhlx200836) (proposed rule
change relating to the listing and trading of options on the Nasdaq Index Products).
\7\ Phlx has clarified that the index option transaction charge
for customer executions, which is currently $0.40 per contract,
applies to brokerdealer transactions. Pursuant to this proposed
rule change, Phlx has stated that brokerdealer transactions in MNX
and MDX index options will be assessed the equity option transaction
charges as set forth on the Exchange's current Summary of Equity
Option and RUT and RMN Charges fee schedule. Pursuant to that fee
schedule, the brokerdealer equity option transaction charges are
either $0.45 per contract for AUTOMdelivered orders or $0.25 per
contract for nonAUTOMdelivered orders. Email communication to
Heather Seidel, Assistant Director, Division of Trading and Markets
(``Division''), Commission, and Leah Mesfin, Special Counsel,
Division, Commission, from Cynthia Hoekstra, Vice President, Phlx, on June 24, 2008.
In addition, the Exchange proposes to adopt a $0.10 per contract side license fee on ``firmrelated'' comparison and transaction charges for the Nasdaq Index Products.\8\ This license fee will be imposed only after the Exchange's $60,000 firmrelated equity option and index option comparison and transaction charge cap is reached.\9\ \8\ Specifically, ``firmrelated'' charges include equity option firm/proprietary comparison charges, equity option firm/proprietary transaction charges, equity option firm/proprietary facilitation transaction charges, index option firm (proprietary and customer executions) comparison charges, index option firm/proprietary transaction charges, and index option firm/proprietary facilitation transaction charges (collectively the ``firmrelated charges''). \9\ Currently, the Exchange imposes a per contract side license fee for equity option and index option ``firm'' transactions on certain licensed products (collectively ``licensed products'') after the $60,000 cap per member organization on all ``firmrelated'' equity option and index option comparison and transaction charges combined is reached Therefore, when a member organization exceeds the $60,000 cap (comprised of firmrelated charges), the member organization is charged $60,000, plus the applicable license fee per contract side for any contracts in licensed products (if any) over those that were included in reaching the $60,000 cap. Thus, such firmrelated charges in the aggregate for one billing month may not exceed $60,000 per month per member organization. For a complete list of the licensed products that are assessed a license fee per contract side after the $60,000 cap is reached, see $60,000 ``Firm Related'' Equity Option and Index Option Cap on the Exchange's fee schedule.
In addition, the Exchange proposes to amend its Summary of Equity
Option and RUT and RMN Charges to reflect that a $0.10 license fee on
the Nasdaq Index Products will be assessed in connection with the
Exchange's current cap on Registered Options Traders (``ROT'')
comparison charges and ROT and specialist transaction charges \10\ on
nonAUTOM delivered equity option contracts \11\ when an ROT or
specialist executes over 14,000 contracts calculated on a daily basis.
These terms apply only to transactions when an ROT or specialist is the
contraparty to a customer order.\12\ Therefore, after the 14,000 non
AUTOM delivered contract level is reached in a specific option,
additional comparison and transaction charges are not assessed on
subsequent option contracts in excess of 14,000 that are executed on
that day in that specific option when the ROT or specialist is the
contraparty to a customer order. Even when the 14,000 cap is reached,
the license fee will be imposed on applicable ROTs and specialists for
equity option transactions on those licensed products that carry a license fee.\13\
\10\ The Exchange does not currently assess a comparison charge
on specialist transactions. Therefore, the cap applies to ROT
comparison and transaction charges combined and separately to specialist transaction charges.
\11\ For purposes of this fee, orders delivered via the Floor
Broker Management System are deemed to be nonAUTOM delivered orders. See Phlx Rule 1063.
\12\ See Securities Exchange Act Release No. 54659 (October 27,
2006), 71 FR 64603 (November 2, 2006) (SRPhlx200667) (capping ROT
comparison charges and ROT and specialist transaction charges when certain requirements are met).
\13\ For a complete list of the licensed products that are
currently assessed a license fee per contract side after the 14,000
equity option contract is reached, see $60,000 ``Firm Related''
Equity Option and Index Option Cap on the Exchange's fee schedule.
This proposal is schedule to become effective for transactions settling on or after June 16, 2008.
The text of the proposed rule change is available at the Exchange's
principal office, on the Exchange's Web site at http://www.phlx.com/
regulatory/reg_rulefilings.aspx, and at the Commission's Public Reference Room.
II. SelfRegulatory 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. SelfRegulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change
The purpose of this proposal is to assess equity option charges,
including payment for order flow charges, on the Nasdaq Index Products
that are competitive with charges assessed on these same products by other exchanges.\14\
\14\ See e.g., Securities Exchange Act Release Nos. 57052
(December 27, 2007), 73 FR 523 (January 3, 2008) (SRAmex2007140)
(assessing license fee of $0.16 per contract side for NDX and MNX
options); 51351 (March 9, 2005), 70 FR 12917 (March 16, 2005)
(relating to transaction fees and license fees for the Nasdaq Index
Products); 57128 (January 10, 2008), 73 FR 2969 (January 16, 2008)
(SRISE200802) (assessing license fee of $0.16 per contract for
trading in options on NDX and MNX); 52983 (December 20, 2005), 70 FR 76475 (December 27, 2005) (SRISE2005047) (adopting a flat
execution fee for public customer orders in ``Premium Products'');
52493 (September 22, 2005), 70 FR 56941 (September 29, 2005) (SR
Amex2005087) (certain transaction fees applicable to the Nasdaq
Index Products); and 55193 (January 30, 2007), 72 FR 5476 (February
6, 2007) (SRCBOE2006111) (amending certain public customer fees for other indexes, ETFs and HOLDRs).
The purpose of assessing the Nasdaq Index Products a license fee of
$0.10 per contract side after reaching the $60,000 cap and the 14,000
cap as described herein is to help defray licensing costs associated
with the trading of these products, while still capping member
organizations' fees enough to attract volume from other exchanges.\15\
The caps operate this way in order to offer an incentive for additional
volume without leaving the Exchange with significant outofpocket
costs. This proposal is scheduled to become effective for transactions settling on or after June 16, 2008.
\15\ Id.
The Exchange believes that its proposal to amend its schedule of
fees is consistent with Section 6(b) of the Act \16\ in general, and
furthers the objectives of Section 6(b)(4) of the Act \17\ in
particular, in that it is an equitable allocation of reasonable fees
and other charges among Exchange members, as all the applicable equity
option charges will be assessed on the Nasdaq Index Products.
Additionally, assessing customer transaction and license fees on the
Nasdaq Index Products, as described herein, should help the Exchange
remain competitive by attracting additional order flow to the Exchange. \16\ 15 U.S.C. 78f(b).
\17\ 15 U.S.C. 78f(b)(4).
B. SelfRegulatory 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. SelfRegulatory 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
Because the foregoing rule change is establishing or changing a
due, fee, or other charge applicable only to a member, it has become
effective pursuant to Section 19(b)(3)(A)(ii) of the Act \18\ and Rule
19b4(f)(2) thereunder.\19\ At any time within 60 days of the filing of
such proposed rule change the Commission may summarily abrogate 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. \18\ 15 U.S.C. 78s(b)(3)(A)(ii).
\19\ 17 CFR 240.19b4(f)(2).
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
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\20\
Florence E. Harmon,
Acting Secretary.
\20\ 17 CFR 200.303(a)(12).
[FR Doc. E815103 Filed 7208; 8:45 am]
BILLING CODE 801001P
14 CFR Part 39 40 CFR Part 52 14 CFR Part 71 33 CFR Part 165 50 CFR Part 679 47 CFR Part 73 26 CFR Part 1 40 CFR Part 180 33 CFR Part 117 50 CFR Part 17 44 CFR Part 67 50 CFR Part 648 14 CFR Part 97 33 CFR Part 100 40 CFR Part 63 50 CFR Part 622 44 CFR Part 65 50 CFR Part 660 26 CFR Part 301 39 CFR Part 111 40 CFR Part 300 6 CFR Part 5 40 CFR Part 271 47 CFR Part 64 40 CFR Parts 52 and 81 50 CFR Part 665 44 CFR Part 64 10 CFR Part 50 49 CFR Part 571 47 CFR Part 76