Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
The Exchange proposes to amend the Exchange's Pricing Schedule under Section VIII, entitled “NASDAQ OMX PSX FEES,” with respect to execution and routing of orders in securities priced at $1 or more per share.
While the changes proposed herein are effective upon filing, the Exchange has designated that the amendments be operative on July 1, 2015.
The text of the proposed rule change is available on the Exchange's Web site at
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.
The purpose of the proposed rule change is to amend certain credits for order execution and routing applicable to the use of the order execution and routing services of the NASDAQ OMX PSX System (“PSX”) by member organizations for all securities traded at $1 or more per share.
The Exchange will increase non-displayed order credits for all orders with midpoint pegging that provide liquidity through PSX. Specifically, the credit tiers for non-displayed orders of a $0.0015 per share executed credit for orders with midpoint pegging that provide liquidity entered by a member organization that provides 1,000,000 shares or more average daily volume of non-displayed liquidity during the month and the credit tier for non-displayed orders of $0.0010 per share executed will be replaced with a single credit tier of $0.0020 per share executed for all orders with midpoint pegging
The Exchange believes that the proposed rule change is consistent with the provisions of Section 6 of the Act,
The proposed increases to the credits in the fee schedule under the Exchange's Pricing Schedule under Section VIII are reflective of the Exchange's ongoing efforts to use pricing incentive programs to attract order flow to the Exchange and improve market quality. The goal of these pricing incentives is to provide meaningful incentives for members to increase their participation on the Exchange.
The Exchange is proposing to increase non-displayed order credits for all orders with midpoint pegging that provide liquidity through PSX by replacing the existing two such tiers with a single tier. Specifically, the credit tiers for non-displayed orders of a $0.0015 per share executed credit for orders with midpoint pegging that provide liquidity entered by a member organization that provides 1,000,000 shares or more average daily volume of non-displayed liquidity during the month and the credit tier for non-displayed orders of $0.0010 per share executed will be replaced with a single credit tier of $0.0020 per share executed for all orders with midpoint pegging that provide liquidity.
The Exchange believes the proposed change is reasonable because the increase to the credit for all orders with midpoint pegging that provide liquidity provides member organizations with a uniform credit designed to incentivize increased midpoint liquidity on PSX. Additionally, the Exchange believes providing a greater credit will act as an incentive for members to increase their participation on the Exchange.
The Exchange believes that the proposed rule change is consistent with an equitable allocation of fees and is not unfairly discriminatory because the single credit for all orders with midpoint pegging that provide liquidity is uniformly available to all members and affects all members equally and in the same way.
The Exchange does not believe that the proposed rule change will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act, as amended.
In this instance, the changes to the credits for all orders with midpoint pegging that provide liquidity do not impose a burden on competition because Exchange membership is optional and is the subject of competition from other exchanges. The increased credit is reflective of the intent to increase the order flow on the Exchange. For these reasons, the Exchange does not believe that the proposed changes will impair the ability of members or competing order execution venues to maintain their competitive standing in the financial markets. Moreover, because there are numerous competitive alternatives to the use of the Exchange, it is likely that the Exchange will lose market share as a result of the changes if they are unattractive to market participants.
Accordingly, Phlx does not believe that the proposed rule changes will impair the ability of members or competing order execution venues to maintain their competitive standing in the financial markets.
No written comments were either solicited or received.
The foregoing rule change has become effective pursuant to Section 19(b)(3)(A)(ii) of the Act.
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:
• Use the Commission's Internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549–1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.