May 23, 2012.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
and Rule 19b-4 
thereunder, notice is hereby given that, on May 16, 2012, 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.
I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change
The Exchange proposes to amend a fee cap on equity options transactions on certain reversals 
and conversion 
strategies in Section II, entitled “Equity Options Fees.” 
The Exchange also proposes to make technical amendments to the Pricing Schedule.
The text of the proposed rule change is available on the Exchange's Web site at http://www.nasdaqtrader.com/micro.aspx?id=PHLXfilings, 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
The purpose of the proposed rule change is to amend the applicability of a fee cap relating to reversal and conversion strategies in Section II of the Pricing Schedule to conform the applicability of that cap to that of the dividend,
and short stock interest 
strategies cap. The Exchange believes that all strategy caps should be applied in the same manner, in this case only when such members are trading in their own proprietary accounts.
Currently, Market Maker,
Firm and Broker-Dealer equity option transaction fees are capped at $1,000 for dividend, merger and short stock interest strategies executed on the same trading day in the same options class when such members are trading in their own proprietary accounts.
The Exchange also currently has a cap for reversal and conversion strategies wherein Market Maker, Professional, Firm and Broker-Dealer options transaction fees in Multiply Listed Options are capped at $500 per day for reversal and conversion strategies executed on the same trading day in the same options class (“Reversal and Conversion Cap”).
The Exchange proposes to further qualify the Reversal and Conversion Cap by applying the cap only when such members are trading in their own proprietary accounts, similar to dividend, merger and short stock interest strategies.
Additionally, the Exchange proposes to make certain technical amendments to the Pricing Schedule. The Exchange recently amended the title of the Pricing Schedule from a “Fee Schedule” to a “Pricing Schedule.” 
There are a few places in the Pricing Schedule, namely in Section III, Part A (Other Transaction Fees, PIXL Pricing) and Section VII ((NASDAQ OMX PSX Fees, Other Requests for Data) that still refer to a Fee Schedule. The Exchange is proposing to amend those references from “Fee Schedule” to a “Pricing Schedule.” The Exchange is also proposing to remove a reference in Section I (Rebates and Fees for Adding and Removing Liquidity in Select Symbols) to the Market Exhaust auction. The Exchange recently filed a rule change to discontinue the Market Exhaust functionality, a feature of the Exchange's PHLX XL® automated trading system.
The reference to Market Exhaust was deleted from Rule 1080(c). This functionality was discontinued as of January 31, 2012. The Exchange proposes to remove a reference to Market Exhaust in Section I of the Pricing Schedule. Finally, the Exchange purposes to replace certain reference symbols with numbers for clarity in various sections of the Pricing Schedule.
2. Statutory Basis
The Exchange believes that its proposal to amend its Pricing Schedule is consistent with Section 6(b) of the Act 
in general, and furthers the objectives of Section 6(b)(4) of the Act 
in particular, in that it is an equitable allocation of reasonable fees and other charges among Exchange members and other persons using its facilities.
The Exchange believes that the proposed amendment to the applicability of the Reversal and Conversion Cap is reasonable because the Exchange is proposing to apply the cap only when such members are trading in their own proprietary account, which is the case today for dividend, merger and short stock interest strategies. All members would continue to be offered an opportunity to reduce option transaction fees in Multiply Listed options for reversals and conversions.
The Exchange also believes that the proposed amendment to the applicability of the Reversal and Conversion Cap is equitable and not unfairly discriminatory because the Exchange would uniformly apply the reversal cap to all members.
The Exchange believes that the technical amendments are reasonable, equitable and not unfairly discriminatory because the Exchange intends to amend the Pricing Schedule to conform the text to recent rule amendments which eliminated and/or replaced certain references.
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.
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.
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:
- 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-Phlx-2012-70. 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-Phlx-2012-70 and should be submitted on or before June 21, 2012.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Elizabeth M. Murphy,
[FR Doc. 2012-13144 Filed 5-30-12; 8:45 am]
BILLING CODE 8011-01-P