Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Order Routing on the Boston Options Exchange Facility, 8763-8765 [2010-3774]
Download as PDF
<![CDATA[
Federal Register / Vol. 75, No. 37 / Thursday, February 25, 2010 / Notices
Act of 1934 (‘‘Act’’),1 is summarily
abrogating three proposed rule changes
of NASDAQ OMX PHLX, Inc. (‘‘Phlx’’ or
‘‘Exchange’’).
On December 22, 2009, on December
31, 2009, and on January 26, 2010, Phlx
filed proposed rule changes to amend its
fee schedule. In SR–Phlx–2009–104,
Phlx proposed to amend its fee
schedule, to among other things, assess
a transaction fee of $0.05 per contract on
Phlx specialists, Streaming Quote
Traders (‘‘SQTs’’) and Remote Streaming
Quote Traders (‘‘RSQTs’’) 2 for equity
option orders directed to them by an
order flow provider and executed
electronically. A Phlx specialist, SQT,
or RSQT would be assessed a
transaction fee of $0.21 per contract
when it trades with an order not
directed to it. In SR–Phlx–2009–116,
Phlx proposed to amend its fee schedule
to adopt, for a two-month pilot period
expiring March 2, 2010, a per contract
transaction fee on market participants
who remove liquidity from the
Exchange in options on Standard &
Poor’s Depositary Receipts/SPDRs
(‘‘SPY’’) and a per contract rebate or
transaction fee for market participants
who add liquidity in SPY options.3 The
amount of such transaction fees and
rebates vary depending on the type of
market participant. In SR–Phlx–2010–
14, Phlx proposed to amend its fee
schedule to apply, for a pilot period
expiring March 2, 2010, the same per
contract transaction fees and rebates
Phlx adopted in SR–Phlx–2009–116 for
transactions in options on SPY to
transactions in options overlying the
PowerShares QQQ Trust (‘‘QQQQ’’) ®,
Ishares Russell 2000 (‘‘IWM’’), and
Citigroup Inc. (‘‘C’’).
The proposed rule changes were
immediately effective upon filing with
the Commission pursuant to Section
19(b)(3)(A) of the Act.4 Pursuant to
Section 19(b)(3)(C) of the Act,5 at any
time within 60 days of the date of filing
a proposed rule change pursuant to
Section 19(b)(1) of the Act,6 the
Commission may summarily abrogate
the change in the rules of the selfregulatory organization and require that
the proposed rule change be re-filed in
accordance with the provisions of
1 15
U.S.C. 78s(b)(3)(C).
Quote Traders, or ‘‘SQTs,’’ and
Remote Streaming Quote Traders, or ‘‘RSQTs,’’ are
Phlx market makers who may generate and submit
option quotations electronically on the Phlx. RSQTs
may only submit quotations from off the floor.
3 Phlx filed Amendment No. 1 to SR–Phlx–2009–
116 on January 5, 2010 to correct a typographical
error in the purpose section to make it consistent
with the fee schedule provided in Exhibit 5 thereto.
4 15 U.S.C. 78s(b)(3)(A).
5 15 U.S.C. 78s(b)(3)(C).
6 15 U.S.C. 78s(b)(1).
jlentini on DSKJ8SOYB1PROD with NOTICES
2 Streaming
VerDate Nov<24>2008
16:34 Feb 24, 2010
Jkt 220001
Section 19(b)(1) of the Act 7 and
reviewed in accordance with Section
19(b)(2) of the Act,8 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.
The Commission is concerned about
whether the proposals are consistent
with the statutory requirements
applicable to a national securities
exchange under the Act, including,
among other provisions, Section 6(b)(4)
of the Act,9 which requires that the rules
of a national securities exchange
provide for the equitable allocation of
reasonable dues, fees, and other charges
among its members and issuers and
other parties using its facilities; Section
6(b)(5) of the Act,10 which requires,
among other things, that the rules of a
national securities exchange not be
designed to permit unfair
discrimination between customers,
issuers, brokers, or dealers; and Section
6(b)(8) of the Act,11 which requires that
the rules of a national securities
exchange do not impose any burden on
competition not necessary or
appropriate in furtherance of the Act.
Accordingly, the Commission believes
that the procedures provided by Section
19(b)(2) of the Act 12 will provide a more
appropriate mechanism for determining
whether the proposed rule changes are
consistent with the Act. Therefore, the
Commission finds that it is appropriate
in the public interest, for the protection
of investors, and otherwise in
furtherance of the purposes of the Act,
to abrogate the proposed rule changes.
It is therefore ordered, pursuant to
Section 19(b)(3)(C) of the Act,13 that File
Nos. SR–Phlx–2009–104, SR–Phlx–
2009–116, as modified by Amendment
No. 1, and SR–Phlx–2010–14, be and
hereby are, summarily abrogated. If Phlx
chooses to re-file the proposed rule
changes, it must do so pursuant to
Sections 19(b)(1) 14 and 19(b)(2) of the
Act.15
By the Commission.
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2010–3791 Filed 2–24–10; 8:45 am]
BILLING CODE 8011–01–P
7 Id.
8 15
U.S.C. 78s(b)(2).
U.S.C. 78f(b)(4).
10 15 U.S.C. 78f(b)(5).
11 15 U.S.C. 78f(b)(8).
12 15 U.S.C. 78s(b)(2).
13 15 U.S.C. 78s(b)(3)(C).
14 15 U.S.C. 78s(b)(1).
15 15 U.S.C. 78s(b)(2).
9 15
PO 00000
Frm 00119
Fmt 4703
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–61536; File No. SR–BX–
2010–014]
Self-Regulatory Organizations;
NASDAQ OMX BX, Inc.; Notice of Filing
and Immediate Effectiveness of
Proposed Rule Change Relating to
Order Routing on the Boston Options
Exchange Facility
February 18, 2010.
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
8, 2010, NASDAQ OMX BX, Inc. (the
‘‘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 the self-regulatory
organization. The Exchange filed the
proposed rule change pursuant to
Section 19(b)(3)(A) of the Act,3 and Rule
19b–4(f)(6) 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.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
NASDAQ OMX BX, Inc. (the
‘‘Exchange’’) proposes to amend Chapter
XII, Section 5 (Order Routing to Away
Exchanges) of the Rules of the Boston
Options Exchange Group, LLC (‘‘BOX’’)
to make the Order Routing Pilot
Permanent. The text of the proposed
rule change is available from the
principal office of the Exchange, on the
Commission’s Web site at https://
www.sec.gov and also on the Exchange’s
Internet Web site at https://
nasdaqomxbx.cchwallstreet.com/
NASDAQOMXBX/Filings/.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and the
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
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A).
4 17 CFR 240.19b–4(f)(6).
2 17
Sfmt 4703
8763
E:\FR\FM\25FEN1.SGM
25FEN1
8764
Federal Register / Vol. 75, No. 37 / Thursday, February 25, 2010 / Notices
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
jlentini on DSKJ8SOYB1PROD with NOTICES
1. Purpose
The purpose of the proposed rule
change is to remove Supplementary
Material .03 to Chapter XII, Section 5, to
make the rules governing the outbound
order routing process permanent. On
October 16, 2009 the Commission
approved 5 the Exchange’s proposal to
amend Chapter XII of the BOX Rules to
provide for the use by BOX of certain
non-affiliated third party routing broker/
dealers (‘‘Routing Broker(s)’’) to route
options orders to one or more Away
Exchange(s) when such Away
Exchange(s) display the Best Bid or Best
Offer in accordance with the Options
Order Protection and Locked/Crossed
Market Plan (‘‘Decentralized Plan’’).6
The Exchange requested that the
proposal be approved on a pilot basis
for three (3) months starting from the
date of the approval of submission of
filing. The Commission approved the
Exchange’s proposal on an accelerated
basis 7 for a pilot period to expire on
January 15, 2010.8 On January 15, 2010,
the effective date of the Order Routing
Pilot was extended until March 15,
2010.9 The Exchange believes
permanent approval is appropriate.
There have been no comments, or
complaints pertaining to the Order
5 See Securities Exchange Act Release No. 60832
(October 16, 2009), 74 FR 54607 (October 22, 2009)
(SR–BX–2009–066)(Notice of Filing and Order
Granting Accelerated Approval of Proposed Rule
Change Relating to Chapter XII of the BOX Rules)
(‘‘Approval Order’’). See also Chapter XII, Section 5
of the BOX Rules. Chapter XII, Section 5 is
consistent with rules approved for other national
securities exchanges. See e.g. Approval Order at
54609, note 24. Terms not otherwise defined herein
shall have the meaning proscribed in the BOX
Rules.
6 See Securities Exchange Act Release No. 60405
(July 30, 2009), 74 FR 39362 (August 6, 2009) (File
No. 4–546) (Order Approving the National Market
System Plan Relating to Options Order Protection
and Locked/Crossed Market Plan).
7 The Exchange requested accelerated approval to
allow BOX to establish and implement mechanisms
to remain fully compliant with the Decentralized
Plan and BOX Rules and to no longer rely upon a
Commission-granted exemption from Rule 608(c) of
Regulations NMS. The pilot period also allowed
interested parties an opportunity to comment on the
proposal before it was permanently approved.
8 See Supra note 5.
9 See Securities Exchange Act Release No. 61399
(January 22, 2010), 75 FR 4603 (January 28, 2010)
(SR–BX–2010–007) (Notice of Filing and Immediate
Effectiveness of Proposed Rule Change Relating to
the Order Routing Pilot on the Boston Options
Exchange Facility).
VerDate Nov<24>2008
16:34 Feb 24, 2010
Jkt 220001
Routing Pilot. The routing process is
operating as intended. Moreover, as
previously noted, Chapter XII, Section 5
is consistent with rules approved for
other national securities exchanges.10
2. Statutory Basis
The Exchange believes that the
proposal is consistent with the
requirements of Section 6(b) of the
Act,11 in general, and Section 6(b)(5) of
the Act,12 in particular, in that it is
designed to foster cooperation and
coordination with persons engaged in
regulating, clearing, settling, processing
information with respect to, and
facilitating transactions in securities, to
remove impediments to and perfect the
mechanism for a free and open market
and a national market system and, in
general, to protect investors and the
public interest. In particular, the
Exchange believes that permanent
approval of the Order Routing Pilot will
result in an ongoing benefit to investors
by affording BOX Options Participants
the choice, on a voluntary basis, to have
their orders routed to one or more Away
Exchange(s) when such Away
Exchange(s) display the Best Bid or Best
Offer, in accordance with the
Decentralized Plan.
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
The Exchange has neither solicited
nor received comments on the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
This proposed rule change is filed
pursuant to paragraph (A) of section
19(b)(3) of the Exchange Act 13 and Rule
19b–4(f)(6) thereunder.14 This proposed
rule change does not significantly affect
the protection of investors or the public
10 See
Supra note 5.
U.S.C. 78f(b).
12 15 U.S.C. 78f(b)(5).
13 15 U.S.C. 78s(b)(3)(A).
14 17 CFR 240.19b–4(f)(6). In addition, as required
under Rule 19b–4(f)(6)(iii), the Exchange has
submitted to the Commission written notice of its
intent to file the proposed rule change, along with
a brief description and the text of the proposed rule
change at least five business days prior to the date
of filing of the proposed rule change, or such
shorter time as designated by the Commission.
11 15
PO 00000
Frm 00120
Fmt 4703
Sfmt 4703
interest, does not impose any significant
burden on competition, and, by its
terms, does not become operative for 30
days after the date of the filing, or such
shorter time as the Commission may
designate if consistent with the
protection of investors and the public
interest. The Exchange believes that this
proposed rule change, which is essential
for competitive purposes and to
promote a free and open market for the
benefit of investors, does not raise any
new, unique or substantive issues from
those raised in the Exchanges initial
proposal to implement the Order
Routing Pilot or the recent extension
tothe Pilot,15 and the rules are
consistent with those of other
exchanges.16 The Exchange believes
permanent approval is appropriate.
There have been no comments, or
complaints pertaining to the Order
Routing Pilot. The routing process is
operating as intended.
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–BX–2010–014 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–BX–2010–014. 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
15 See
16 See
E:\FR\FM\25FEN1.SGM
Supra note 5 and note 9.
Supra note 5.
25FEN1
Federal Register / Vol. 75, No. 37 / Thursday, February 25, 2010 / Notices
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 Web site viewing and
printing 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–BX–2010–014 and should
be submitted on or before March 18,
2010.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.17
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010–3774 Filed 2–24–10; 8:45 am]
BILLING CODE 8011–01–P
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 is filing with the
Commission a proposal to expand the
number of components in the PHLX
Semiconductor SectorSM known as
SOXSM, on which options are listed and
traded.3 No other changes are made to
the index or options on the index.
A copy of the filing is available on the
Exchange’s Web site at https://
nasdaqomxphlx.cchwallstreet.com/
NASDAQOMXPHLX/Filings/, 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.
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–61539; File No. SR–Phlx–
2010–20]
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
Self-Regulatory Organizations;
NASDAQ OMX PHLX, Inc.; Notice of
Filing of Proposed Rule Change To
Expand the Number of Components in
the PHLX Semiconductor SectorSM
Known as SOXSM, on Which Options
Are Listed and Traded
jlentini on DSKJ8SOYB1PROD with NOTICES
February 18, 2010.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’) 1 and Rule 19b–4 2 thereunder,
notice is hereby given that on February
2, 2010, NASDAQ OMX PHLX, Inc.
(‘‘Phlx’’ or ‘‘Exchange’’) filed with the
Securities and Exchange Commission
(the ‘‘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
17 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
VerDate Nov<24>2008
16:34 Feb 24, 2010
Jkt 220001
The purpose of the proposal is to
expand the number of components in
the PHLX Semiconductor SectorSM
known as SOXSM (‘‘SOX’’ or the
‘‘Index’’), on which options are listed
and traded.
SOX options subsequent to this
proposal will be identical to SOX
options that are currently listed and
trading except for the number of
components in the underlying Index,
and will trade pursuant to the same
(unchanged) contract specifications.4
The singular post-proposal difference in
SOX options is that they will overlie an
Index with thirty components where the
current Index has twenty-one
components.
3 PHLX Semiconductor SectorSM may also be
known as PHLX Semiconductor Index or PHLX
Semiconductor SectorSM Index.
4 The contract specifications for SOX options are
available at https://www.nasdaqtrader.com/
micro.aspx?id=phlxsectorscontractspecs#SOX.
PO 00000
Frm 00121
Fmt 4703
Sfmt 4703
8765
Background
The Exchange currently has initial
listing and maintenance listing
standards for options on indexes in Rule
1009A that are designed to allow the
Exchange to list options on narrowbased indexes 5 and broad-based
indexes 6 pursuant to generic listing
standards (the ‘‘Index Listing
Standards’’).7 SOX is a narrow-based
index and SOX options overlying the
Index are listed and traded pursuant to
Rule 1009A(b). SOX options were
originally listed and began trading in
1994 pursuant to Exchange approval.8
SOX is a modified market
capitalization-weighted index composed
of twenty-one companies primarily
involved in the design, distribution,
manufacture, and sale of
semiconductors, and is one of several
narrow-based sector indexes on which
options are listed and traded on the
Exchange.9 SOX provides exposure to
the fast-growing (yet extremely volatile)
semiconductor industry. When
investors want information and
investment opportunities specific to
semiconductors, they look most often to
the SOX index.10 Indeed, the popularity
of SOX is reflected in the trading
volumes of options on the Index.11 It
5 A narrow-based index or industry index is
defined as: An index designed to be representative
of a particular industry or a group of related
industries. The term ‘‘narrow-based index’’ includes
indices the constituents of which are all
headquartered within a single country. See Rule
1000A(b)(12).
6 A broad-based index or market index is defined
as: An index designed to be representative of a
stock market as a whole or of a range of companies
in unrelated industries. See Rule 1000A(b)(11).
7 Rule 1009A establishes generic listing standards
for options on narrow-based and broad-based
indexes pursuant to Rule 19b–4(e) of the Act. See
Securities Exchange Act Release No. 40761
(December 8, 1998), 63 FR 70952 (December 22,
1998). The listing standards in Rule 1009A are
similar to those of other options exchanges such as,
for example, Chicago Board Options Exchange,
Incorporated; International Stock Exchange LLC;
and The NASDAQ Stock Market LLC.
8 See Securities Exchange Act Release No. 34546
(August 18, 1994), 59 FR 43881 (August 25, 1994)
(SR–Phlx–94–02) (order approving proposal to list
and trade the SOX index).
9 Other sector indexes on which options are listed
and traded on the Exchange include: KBW Bank
IndexSM (BKXSM); PHLX Gold/Silver SectorSM
(XAUSM); PHLX Housing SectorSM (HGXSM); PHLX
Oil Service SectorSM (OSXSM); PHLX Utility
SectorSM (UTYSM); NASDAQ OMX China IndexSM
(CNZSM); SIG Energy MLP IndexSM (SVOTM); and
SIG Oil Exploration & Production IndexTM (EPXSM).
10 Other currently available investment products
that evaluate the semiconductor market, albeit
differently from SOX, include Semiconductor
HOLDRs (SMH) and iShares S&P North American
Technology-Semiconductors Index Fund (IGW).
11 During 2009, SOX has traded an average of
29,127 contracts per month and has traded as much
as 23,339 contracts in a day (June 16, 2009). As of
December 31, 2009, there were 11,976 contracts of
open interest in SOX.
E:\FR\FM\25FEN1.SGM
25FEN1
]]>Agencies
[Federal Register Volume 75, Number 37 (Thursday, February 25, 2010)]
[Notices]
[Pages 8763-8765]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-3774]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-61536; File No. SR-BX-2010-014]
Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change Relating to
Order Routing on the Boston Options Exchange Facility
February 18, 2010.
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 8, 2010, NASDAQ OMX BX, Inc. (the ``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 the self-regulatory organization. The Exchange
filed the proposed rule change pursuant to Section 19(b)(3)(A) of the
Act,\3\ and Rule 19b-4(f)(6) 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 240.19b-4.
\3\ 15 U.S.C. 78s(b)(3)(A).
\4\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
NASDAQ OMX BX, Inc. (the ``Exchange'') proposes to amend Chapter
XII, Section 5 (Order Routing to Away Exchanges) of the Rules of the
Boston Options Exchange Group, LLC (``BOX'') to make the Order Routing
Pilot Permanent. The text of the proposed rule change is available from
the principal office of the Exchange, on the Commission's Web site at
https://www.sec.gov and also on the Exchange's Internet Web site at
https://nasdaqomxbx.cchwallstreet.com/NASDAQOMXBX/Filings/.
II. Self-Regulatory Organization's Statement of the Purpose of, and the
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
[[Page 8764]]
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
The purpose of the proposed rule change is to remove Supplementary
Material .03 to Chapter XII, Section 5, to make the rules governing the
outbound order routing process permanent. On October 16, 2009 the
Commission approved \5\ the Exchange's proposal to amend Chapter XII of
the BOX Rules to provide for the use by BOX of certain non-affiliated
third party routing broker/dealers (``Routing Broker(s)'') to route
options orders to one or more Away Exchange(s) when such Away
Exchange(s) display the Best Bid or Best Offer in accordance with the
Options Order Protection and Locked/Crossed Market Plan
(``Decentralized Plan'').\6\
---------------------------------------------------------------------------
\5\ See Securities Exchange Act Release No. 60832 (October 16,
2009), 74 FR 54607 (October 22, 2009) (SR-BX-2009-066)(Notice of
Filing and Order Granting Accelerated Approval of Proposed Rule
Change Relating to Chapter XII of the BOX Rules) (``Approval
Order''). See also Chapter XII, Section 5 of the BOX Rules. Chapter
XII, Section 5 is consistent with rules approved for other national
securities exchanges. See e.g. Approval Order at 54609, note 24.
Terms not otherwise defined herein shall have the meaning proscribed
in the BOX Rules.
\6\ See Securities Exchange Act Release No. 60405 (July 30,
2009), 74 FR 39362 (August 6, 2009) (File No. 4-546) (Order
Approving the National Market System Plan Relating to Options Order
Protection and Locked/Crossed Market Plan).
---------------------------------------------------------------------------
The Exchange requested that the proposal be approved on a pilot
basis for three (3) months starting from the date of the approval of
submission of filing. The Commission approved the Exchange's proposal
on an accelerated basis \7\ for a pilot period to expire on January 15,
2010.\8\ On January 15, 2010, the effective date of the Order Routing
Pilot was extended until March 15, 2010.\9\ The Exchange believes
permanent approval is appropriate. There have been no comments, or
complaints pertaining to the Order Routing Pilot. The routing process
is operating as intended. Moreover, as previously noted, Chapter XII,
Section 5 is consistent with rules approved for other national
securities exchanges.\10\
---------------------------------------------------------------------------
\7\ The Exchange requested accelerated approval to allow BOX to
establish and implement mechanisms to remain fully compliant with
the Decentralized Plan and BOX Rules and to no longer rely upon a
Commission-granted exemption from Rule 608(c) of Regulations NMS.
The pilot period also allowed interested parties an opportunity to
comment on the proposal before it was permanently approved.
\8\ See Supra note 5.
\9\ See Securities Exchange Act Release No. 61399 (January 22,
2010), 75 FR 4603 (January 28, 2010) (SR-BX-2010-007) (Notice of
Filing and Immediate Effectiveness of Proposed Rule Change Relating
to the Order Routing Pilot on the Boston Options Exchange Facility).
\10\ See Supra note 5.
---------------------------------------------------------------------------
2. Statutory Basis
The Exchange believes that the proposal is consistent with the
requirements of Section 6(b) of the Act,\11\ in general, and Section
6(b)(5) of the Act,\12\ in particular, in that it is designed to foster
cooperation and coordination with persons engaged in regulating,
clearing, settling, processing information with respect to, and
facilitating transactions in securities, to remove impediments to and
perfect the mechanism for a free and open market and a national market
system and, in general, to protect investors and the public interest.
In particular, the Exchange believes that permanent approval of the
Order Routing Pilot will result in an ongoing benefit to investors by
affording BOX Options Participants the choice, on a voluntary basis, to
have their orders routed to one or more Away Exchange(s) when such Away
Exchange(s) display the Best Bid or Best Offer, in accordance with the
Decentralized Plan.
---------------------------------------------------------------------------
\11\ 15 U.S.C. 78f(b).
\12\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
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
The Exchange has neither solicited nor received comments on the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
This proposed rule change is filed pursuant to paragraph (A) of
section 19(b)(3) of the Exchange Act \13\ and Rule 19b-4(f)(6)
thereunder.\14\ This proposed rule change does not significantly affect
the protection of investors or the public interest, does not impose any
significant burden on competition, and, by its terms, does not become
operative for 30 days after the date of the filing, or such shorter
time as the Commission may designate if consistent with the protection
of investors and the public interest. The Exchange believes that this
proposed rule change, which is essential for competitive purposes and
to promote a free and open market for the benefit of investors, does
not raise any new, unique or substantive issues from those raised in
the Exchanges initial proposal to implement the Order Routing Pilot or
the recent extension tothe Pilot,\15\ and the rules are consistent with
those of other exchanges.\16\ The Exchange believes permanent approval
is appropriate. There have been no comments, or complaints pertaining
to the Order Routing Pilot. The routing process is operating as
intended.
---------------------------------------------------------------------------
\13\ 15 U.S.C. 78s(b)(3)(A).
\14\ 17 CFR 240.19b-4(f)(6). In addition, as required under Rule
19b-4(f)(6)(iii), the Exchange has submitted to the Commission
written notice of its intent to file the proposed rule change, along
with a brief description and the text of the proposed rule change at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
\15\ See Supra note 5 and note 9.
\16\ See Supra note 5.
---------------------------------------------------------------------------
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 rule-comments@sec.gov. Please include
File Number SR-BX-2010-014 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-BX-2010-014. 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
[[Page 8765]]
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 Web site viewing and printing 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-BX-
2010-014 and should be submitted on or before March 18, 2010.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\17\
---------------------------------------------------------------------------
\17\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-3774 Filed 2-24-10; 8:45 am]
BILLING CODE 8011-01-P
