Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing of Proposed Rule Change Regarding Fees for Orders Routed via the Options Intermarket Linkage, 37520-37521 [E8-14833]

Download as PDF 37520 Federal Register / Vol. 73, No. 127 / Tuesday, July 1, 2008 / Notices concerned solely with the administration of the Exchange. At any time within 60 days of the filing of the 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. 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 (https://www.sec.gov/ rules/sro.shtml); or • Send an e-mail to rulecomments@sec.gov. Please include File Number SR–NASDAQ–2008–56 on the subject line. should refer to File No. SR–NASDAQ– 2008–056 and should be submitted on or before July 22, 2008. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.10 Florence E. Harmon, Acting Secretary. [FR Doc. E8–14830 Filed 6–30–08; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–58014; File No. SR– NASDAQ–2008–055] Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing of Proposed Rule Change Regarding Fees for Orders Routed via the Options Intermarket Linkage June 24, 2008. sroberts on PROD1PC70 with NOTICES 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 June 18, 2008, The NASDAQ Stock Market LLC Paper Comments (‘‘Nasdaq’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission • Send paper comments in triplicate (‘‘Commission’’) the proposed rule to Secretary, Securities and Exchange change as described in Items I, II, and Commission, 100 F Street, NE., III below, which Items have been Washington, DC 20549–1090. substantially prepared by Nasdaq. The All submissions should refer to File Commission is publishing this notice to Number SR–NASDAQ–2008–056. This solicit comments on the proposed rule file number should be included on the subject line if e-mail is used. To help the change from interested persons. Commission process and review your I. Self-Regulatory Organization’s comments more efficiently, please use Statement of the Terms of Substance of only one method. The Commission will the Proposed Rule Change post all comments on the Commission’s Nasdaq proposes to amend its fees Internet Web site (https://www.sec.gov/ related to orders routed to the NASDAQ rules/sro/shtml). Copies of the Options Market (‘‘NOM’’) via the submission, all subsequent Options Intermarket Linkage amendments, all written statements (‘‘Linkage’’) 3 to establish a Linkage Fee with respect to the proposed rule Pilot Program that is effective through change that are filed with the July 31, 2009 and to clarify the Commission, and all written application of options transaction fees communications relating to the for trades executed through Linkage on 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 inspection and copying in the Commission’s Public Reference Room, on official business days between the hours of 10 a.m. and 3 p.m. Copies of such filing will also 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 VerDate Aug<31>2005 21:01 Jun 30, 2008 Jkt 214001 10 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 On July 28, 2000, the Commission approved a national market system plan for the purpose of creating and operating an intermarket options market linkage proposed by the American Stock Exchange LLC, Chicago Board Options Exchange, Inc., and International Securities Exchange LLC. See Securities Exchange Act Release No. 43086 (July 28, 2000), 65 FR 48023 (August 4, 2000). Subsequently, the Philadelphia Stock Exchange, Inc., Pacific Exchange, Inc. (n/k/a NYSE Arca), Boston Stock Exchange, Inc., and Nasdaq joined the Linkage Plan. See Securities Exchange Act Release Nos. 43573 (November 16, 2000), 65 FR 70851 (November 28, 2000); 43574 (November 16, 2000), 65 FR 70850 (November 28, 2000); 49198 (February 5, 2004), 69 FR 7029 (February 12, 2004); and 57545 (March 21, 2008), 73 FR 16394 (March 27, 2008). 1 15 PO 00000 Frm 00114 Fmt 4703 Sfmt 4703 the Exchange. Nasdaq will implement the proposed rule upon approval. The text of the proposed rule change is available at Nasdaq, the Commission’s Public Reference Room, and https:// www.nasdaq.com. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, Nasdaq 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. Nasdaq 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 purpose of this proposed rule change is to establish a Linkage Fee Pilot Program that is effective through July 31, 2009 and to clarify the application of options transaction fees for trades executed through the Linkage on the Exchange. Under this pilot, the fees applicable to Nasdaq members entering orders directly into NOM systems will apply to Nasdaq members and non-members that enter orders into other options exchanges that are then routed to Nasdaq via the Linkage and executed on NOM. Under the Exchange’s current Rule 7050(1), the fee for members entering an order that executes on the NOM is $.45 per executed contract. Nasdaq’s current rule does not differentiate between orders entered directly into the NOM via Nasdaq systems and orders received by Nasdaq via the Linkage. Since the launch of the NOM, Nasdaq has been assessing the same fee for all orders executed on behalf of members on its market regardless of whether such orders were entered directly into Nasdaq systems or via the Linkage. Nasdaq did not differentiate between those groups because firms that are members of away markets are, by and large, also members of Nasdaq. Nasdaq states that, all orders received via the Linkage and executed by Nasdaq have been entered on away markets by firms that are also Nasdaq members. Nonetheless, the possibility exists that a firm that is not a Nasdaq member could enter an order that is routed to Nasdaq via the Linkage and executed by E:\FR\FM\01JYN1.SGM 01JYN1 Federal Register / Vol. 73, No. 127 / Tuesday, July 1, 2008 / Notices Nasdaq. In that case, under Nasdaq’s current rule, Nasdaq would lack an approved rule to assess an execution fee to that non-member. Nasdaq believes it is proper to charge the same fee for executions regardless of whether an order was entered directly into Nasdaq’s systems or routed to Nasdaq via the Linkage. Since most firms join multiple exchanges, pricing that differentiates between orders originating in different markets tends to skew trading behaviors in ways that are unintended and possibly detrimental. B. Institute proceedings to determine whether the proposed rule change should be disapproved. 2. Statutory Basis • Use the Commission’s Internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an e-mail to rulecomments@sec.gov. Please include File No. SR–NASDAQ–2008–055 on the subject line. The proposed rule change is consistent with Section 6(b) of the Act,4 in general, and furthers the objectives of Section 6(b)(4) of the Act,5 in particular, in that it is designed to provide for the equitable allocation of reasonable dues, fees, and other charges among its members and other persons using its facilities. The proposed Linkage Fee Pilot Program will result in the same fee being charged for the execution of all orders regardless of the manner in which they are sent to the Exchange. 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 that is not necessary or appropriate in furtherance of the purposes of the Act. To the contrary, Nasdaq notes that the options markets compete aggressively on the basis of execution price and that the proposal is part of Nasdaq’s attempt to compete effectively. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others Written comments were neither solicited nor received. sroberts on PROD1PC70 with NOTICES III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Within 35 days of the date of publication of this notice in the Federal Register or within such longer period (i) as the Commission may designate up to 90 days of such date 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 such proposed rule change, or 4 15 5 15 U.S.C. 78f(b). U.S.C. 78f(b)(4). VerDate Aug<31>2005 21:01 Jun 30, 2008 Jkt 214001 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 37521 For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.6 Florence E. Harmon, Acting Secretary. [FR Doc. E8–14833 Filed 6–30–08; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–58013; File No. SR–NYSE– 2008–48] Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending NYSE Rule 103A To Exempt Executive Floor Governors From Floor Member Continuing Education June 24, 2008. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the • Send paper comments in triplicate ‘‘Act’’) 1 and Rule 19b–4 thereunder,2 notice is hereby given that on June 19, to Secretary, Securities and Exchange Commission, Station Place, 100 F Street, 2008, New York Stock Exchange LLC (‘‘NYSE’’ or the ‘‘Exchange’’) filed with NE., Washington, DC 20549–1090. the Securities and Exchange All submissions should refer to File Commission (the ‘‘Commission’’) the Number SR–NASDAQ–2008–055. This proposed rule change as described in file number should be included on the Items I and II below, which Items have subject line if e-mail is used. To help the been substantially prepared by the Commission process and review your Exchange. The Exchange filed the comments more efficiently, please use proposal as a ‘‘non-controversial’’ only one method. The Commission will proposed rule change pursuant to post all comments on the Commission’s Section 19(b)(3)(A) of the Act 3 and Rule Internet Web site (https://www.sec.gov/ 19b–4(f)(6) thereunder,4 which rendered rules/sro.shtml). Copies of the the proposal effective upon filing with the Commission. The Commission is submission, all subsequent publishing this notice to solicit amendments, all written statements comments on the proposed rule change with respect to the proposed rule from interested persons. change that are filed with the Commission, and all written I. Self-Regulatory Organization’s communications relating to the Statement of the Terms of Substance of proposed rule change between the the Proposed Rule Change Commission and any person, other than The Exchange is proposing to amend those that may be withheld from the NYSE Rule 103A(a)(3) (Specialist Stock public in accordance with the Reallocation and Member Education provisions of 5 U.S.C. 552, will be and Performance) to exempt Executive available for inspection and copying in Floor Governors (‘‘EFGs’’) of the the Commission’s Public Reference Exchange from Floor Member Room, on official business days between Continuing Education (‘‘FMCE’’) the hours of 10 a.m. and 3 p.m. Copies requirements. The Exchange further of such filing also will be available for proposes, in connection with specific inspection and copying at the principal FMCE modules, to deem members who office of the Exchange. All comments substantially assisted NYSE Regulation, received will be posted without change; Inc. (‘‘NYSE Regulation’’) staff in the the Commission does not edit personal development of such modules as having identifying information from fulfilled their obligation to complete submissions. You should submit only required training on that module. The information that you wish to make 6 17 CFR 200.30–3(a)(12). available publicly. All submissions 1 15 U.S.C. 78s(b)(1). should refer to File Number SR– 2 17 CFR 240.19b–4. NASDAQ–2008–055 and should be 3 15 U.S.C. 78s(b)(3)(A)(iii). submitted on or before July 22, 2008. 4 17 CFR 240.19b–4(f)(6). Paper Comments PO 00000 Frm 00115 Fmt 4703 Sfmt 4703 E:\FR\FM\01JYN1.SGM 01JYN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 73, Number 127 (Tuesday, July 1, 2008)]
[Notices]
[Pages 37520-37521]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-14833]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-58014; File No. SR-NASDAQ-2008-055]


Self-Regulatory Organizations; The NASDAQ Stock Market LLC; 
Notice of Filing of Proposed Rule Change Regarding Fees for Orders 
Routed via the Options Intermarket Linkage

June 24, 2008.
    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 June 18, 2008, 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 substantially prepared by Nasdaq. 
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 240.19b-4.
---------------------------------------------------------------------------

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

    Nasdaq proposes to amend its fees related to orders routed to the 
NASDAQ Options Market (``NOM'') via the Options Intermarket Linkage 
(``Linkage'') \3\ to establish a Linkage Fee Pilot Program that is 
effective through July 31, 2009 and to clarify the application of 
options transaction fees for trades executed through Linkage on the 
Exchange. Nasdaq will implement the proposed rule upon approval. The 
text of the proposed rule change is available at Nasdaq, the 
Commission's Public Reference Room, and https://www.nasdaq.com.
---------------------------------------------------------------------------

    \3\ On July 28, 2000, the Commission approved a national market 
system plan for the purpose of creating and operating an intermarket 
options market linkage proposed by the American Stock Exchange LLC, 
Chicago Board Options Exchange, Inc., and International Securities 
Exchange LLC. See Securities Exchange Act Release No. 43086 (July 
28, 2000), 65 FR 48023 (August 4, 2000). Subsequently, the 
Philadelphia Stock Exchange, Inc., Pacific Exchange, Inc. (n/k/a 
NYSE Arca), Boston Stock Exchange, Inc., and Nasdaq joined the 
Linkage Plan. See Securities Exchange Act Release Nos. 43573 
(November 16, 2000), 65 FR 70851 (November 28, 2000); 43574 
(November 16, 2000), 65 FR 70850 (November 28, 2000); 49198 
(February 5, 2004), 69 FR 7029 (February 12, 2004); and 57545 (March 
21, 2008), 73 FR 16394 (March 27, 2008).
---------------------------------------------------------------------------

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

    In its filing with the Commission, Nasdaq 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. Nasdaq 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 purpose of this proposed rule change is to establish a Linkage 
Fee Pilot Program that is effective through July 31, 2009 and to 
clarify the application of options transaction fees for trades executed 
through the Linkage on the Exchange. Under this pilot, the fees 
applicable to Nasdaq members entering orders directly into NOM systems 
will apply to Nasdaq members and non-members that enter orders into 
other options exchanges that are then routed to Nasdaq via the Linkage 
and executed on NOM.
    Under the Exchange's current Rule 7050(1), the fee for members 
entering an order that executes on the NOM is $.45 per executed 
contract. Nasdaq's current rule does not differentiate between orders 
entered directly into the NOM via Nasdaq systems and orders received by 
Nasdaq via the Linkage. Since the launch of the NOM, Nasdaq has been 
assessing the same fee for all orders executed on behalf of members on 
its market regardless of whether such orders were entered directly into 
Nasdaq systems or via the Linkage.
    Nasdaq did not differentiate between those groups because firms 
that are members of away markets are, by and large, also members of 
Nasdaq. Nasdaq states that, all orders received via the Linkage and 
executed by Nasdaq have been entered on away markets by firms that are 
also Nasdaq members. Nonetheless, the possibility exists that a firm 
that is not a Nasdaq member could enter an order that is routed to 
Nasdaq via the Linkage and executed by

[[Page 37521]]

Nasdaq. In that case, under Nasdaq's current rule, Nasdaq would lack an 
approved rule to assess an execution fee to that non-member.
    Nasdaq believes it is proper to charge the same fee for executions 
regardless of whether an order was entered directly into Nasdaq's 
systems or routed to Nasdaq via the Linkage. Since most firms join 
multiple exchanges, pricing that differentiates between orders 
originating in different markets tends to skew trading behaviors in 
ways that are unintended and possibly detrimental.
2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) of the 
Act,\4\ in general, and furthers the objectives of Section 6(b)(4) of 
the Act,\5\ in particular, in that it is designed to provide for the 
equitable allocation of reasonable dues, fees, and other charges among 
its members and other persons using its facilities. The proposed 
Linkage Fee Pilot Program will result in the same fee being charged for 
the execution of all orders regardless of the manner in which they are 
sent to the Exchange.
---------------------------------------------------------------------------

    \4\ 15 U.S.C. 78f(b).
    \5\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

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 that is not necessary or appropriate 
in furtherance of the purposes of the Act. To the contrary, Nasdaq 
notes that the options markets compete aggressively on the basis of 
execution price and that the proposal is part of Nasdaq's attempt to 
compete effectively.

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

    Written comments were neither solicited nor received.

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

    Within 35 days of the date of publication of this notice in the 
Federal Register or within such longer period (i) as the Commission may 
designate up to 90 days of such date 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 such 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 (https://
www.sec.gov/rules/sro.shtml); or
     Send an e-mail to rule-comments@sec.gov. Please include 
File No. SR-NASDAQ-2008-055 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NASDAQ-2008-055. This 
file number should be included on the subject line if e-mail 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 (https://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 inspection 
and copying in the Commission's Public Reference Room, on official 
business days between the hours of 10 a.m. and 3 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-NASDAQ-2008-055 and should be submitted on or before 
July 22, 2008.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\6\
---------------------------------------------------------------------------

    \6\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Acting Secretary.
[FR Doc. E8-14833 Filed 6-30-08; 8:45 am]
BILLING CODE 8010-01-P

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