Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Order Approving a Proposed Rule Change Relating to the Price Improvement Period To Permit an Initiating Participant To Designate a PIP Surrender Quantity, 4400-4401 [2011-1435]
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Federal Register / Vol. 76, No. 16 / Tuesday, January 25, 2011 / Notices
Commission finds that the proposed
amendment is consistent with the
requirements of Section 11A of the Act,5
and Rule 608 of Regulation NMS.6 The
Plan established appropriate procedures
for market centers to follow in making
their monthly reports required pursuant
to Rule 605 of Regulation NMS available
to the public in a uniform, readily
accessible, and usable electronic format.
The amendment to include BYX as a
participant in the Joint-SRO Plan should
contribute to the maintenance of fair
and orderly markets and remove
impediments to and perfect the
mechanisms of a national market system
by facilitating the uniform public
disclosure of order execution
information by all market centers. The
Commission believes that it is necessary
and appropriate in the public interest,
for the maintenance of fair and orderly
markets, to remove impediments to, and
perfect mechanisms of, a national
market system to allow BYX to become
a participant in the Joint-SRO Plan. The
Commission finds, therefore, that
approving the amendment to the JointSRO Plan is appropriate and consistent
with Section 11A of the Act.7
III. Conclusion
It is therefore ordered, pursuant to
Section 11A(a)(3)(B) of the Act 8 and
Rule 608 of Regulation NMS,9 that the
amendment to the Joint-SRO Plan to add
BYX as a participant is approved and
BYX is authorized to act jointly with the
other participants to the Joint-SRO Plan
in planning, developing, operating, or
regulating the Plan as a means of
facilitating a national market system.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.10
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011–1431 Filed 1–24–11; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–63731; File No. SR–BX–
2010–083]
Self-Regulatory Organizations;
NASDAQ OMX BX, Inc.; Order
Approving a Proposed Rule Change
Relating to the Price Improvement
Period To Permit an Initiating
Participant To Designate a PIP
Surrender Quantity
January 19, 2011.
On November 24, 2010, NASDAQ
OMX BX, Inc. (the ‘‘Exchange’’) filed
with the Securities and Exchange
Commission (‘‘Commission’’), pursuant
to Section 19(b)(1) of the Securities
Exchange Act of 1934 (‘‘Act’’) 1 and Rule
19b–4 thereunder,2 a proposed rule
change to the Rules of the Boston
Options Exchange Group, LLC (‘‘BOX’’)
to permit an Options Participant
initiating a Price Improvement Period
(‘‘PIP’’) to designate a PIP Surrender
Quantity. Notice of the proposed rule
change was published for comment in
the Federal Register on December 8,
2010.3 The Commission received no
comments on the proposal.
Currently, the BOX rules that govern
the PIP (‘‘PIP Rules’’) 4 generally allow
an Options Participant initiating a PIP
(‘‘Initiating Participant’’) to retain
priority and trade allocation privileges
for forty percent (40%) of the size of a
PIP Order upon conclusion of the PIP
auction.5 This proposed rule change
will permit an Initiating Participant,
when starting a PIP auction, to submit
the Primary Improvement Order to BOX
with a designation to specify a quantity
of contracts that it is willing to
‘‘surrender’’ from the number of
contracts to which it is entitled to other
Options Participants (‘‘PIP Surrender
Quantity’’).6 By designating a PIP
Surrender Quantity, the Initiating
Participant could potentially be
allocated less than the forty percent
(40%) to which it may be entitled under
BOX Rules.7
9 17
CFR 242.608.
CFR 200.30–3(a)(29).
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 See Securities Exchange Act Release No. 63416
(December 2, 2010), 75 FR 76503.
4 See Chapter V, Section 18 of the Rules of the
Boston Options Exchange Group, LLC (‘‘BOX
Rules’’).
5 See id., paragraphs f(i)–f(ii).
6 The Initiating Participant would specify the PIP
Surrender Quantity as a number of contracts, not as
a percentage of the total PIP Order. Telephone
conversation between Michael Burbach, Vice
President of Legal Affairs, BOX and Ira Brandriss,
mstockstill on DSKH9S0YB1PROD with NOTICES
10 17
5 15
U.S.C. 78k–1.
CFR 242.608.
7 15 U.S.C. 78k–1.
8 15 U.S.C. 78k–1(a)(3)(B).
9 17 CFR 242.608.
10 17 CFR 200.30–3(a)(29).
6 17
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18:40 Jan 24, 2011
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The proposed rule change further
makes clear that in no case shall the
Initiating Participant’s use of the
Surrender Quantity function result in an
allocation to the Initiating Participant
that would be greater than the
maximum allowable allocation the
Initiating Participant would otherwise
receive in accordance with the
allocation procedures set forth in the
PIP Rules.8 The proposal specifies that
the PIP Surrender Quantity shall not be
effective for an amount that is lesser
than or equal to sixty percent (60%) of
the size of the PIP Order.
Additionally, the proposed rule
change will modify the BOX Trading
Host’s trade allocation at the conclusion
of the PIP auction to account for the PIP
Surrender Quantity. The proposal
specifies that when the BOX Trading
Host determines the priority and trade
allocation amounts for the Initiating
Participant upon the conclusion of the
PIP auction, the Trading Host will
automatically adjust the trade
allocations to the other PIP Participants
according to the priority set forth
generally in the PIP Rules,9 providing a
total amount to the other PIP
Participants up to the PIP Surrender
Quantity. Under the proposal, the
Primary Improvement Order is allocated
the remaining size of the PIP Order, if
any. If the aggregate size of other PIP
Participants’ contra orders is not equal
to or greater than the PIP Surrender
Quantity, then the remaining PIP
Surrender Quantity shall be left unfilled
by those participants and the Primary
Improvement Order shall be allocated
the remaining size of the PIP Order as
set forth in the PIP Rules.10 The
Exchange has stated that it will provide
Options Participants with three (3)
business days notice, via Information
Circular, about the implementation date
of the PIP Surrender Quantity prior to
7 The Primary Improvement Order would also
still yield priority to certain competing orders in
certain circumstances. See PIP Rules, supra note 4,
paragraph (f)(iii). In the case of a Max Improvement
Primary Improvement Order, see subsection (e)(ii)
of the PIP Rules, the Surrender Quantity would be
deducted from the number of contracts, if any,
remaining for the Initiating Participant at the last
level of allocation—i.e., from the 40% share to
which the Initiating Participant is entitled at that
level—and ceded to any other Options Participants
at that level. Thus it is possible, under the proposed
rule change, that if the Surrender Quantity is greater
than the number of contracts remaining for the
Initiating Participant at the last level of allocation,
the Initiating Participant will receive no contracts
at that level. Telephone conversation between
Michael Burbach, Vice President of Legal Affairs,
BOX, and Ira Brandriss, Special Counsel and
Nicholas Shwayri, Attorney-Advisor, Division of
Trading and Markets, Commission, January 19,
2011.
8 See, generally id., paragraph (f).
9 See id., paragraph (e).
E:\FR\FM\25JAN1.SGM
25JAN1
Federal Register / Vol. 76, No. 16 / Tuesday, January 25, 2011 / Notices
its implementation in the BOX trading
system.
After careful review, the Commission
finds that the proposed rule change is
consistent with the requirements of the
Act and the rules and regulations
thereunder applicable to a national
securities exchange.11 In particular, the
Commission finds that the proposed
rule change is consistent with the
requirements of Section 6(b)(5) of the
Act,12 which requires, among other
things, that the rules of a national
securities exchange be designed to
prevent fraudulent and manipulative
acts and practices, to promote just and
equitable principles of trade, 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. The Commission
believes that Initiating Participant’s use
of the Surrender Quantity function
could benefit investors by allowing an
Initiating Participant the flexibility to
designate a lower amount than the forty
percent (40%) of the PIP Order to which
the Initiating Participant is entitled,
thereby providing the other PIP
Participants with the opportunity to
receive increased trade allocations.
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act, that the
proposed rule change (SR–BX–2010–
083), be and hereby is approved.
(‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on January 6,
2011, The NASDAQ Stock Market LLC
(‘‘Nasdaq’’) filed with the Securities and
Exchange Commission (‘‘Commission’’)
the proposed rule change as described
in Items I and II, which Items have been
prepared by Nasdaq. The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.13
Elizabeth M. Murphy,
Secretary.
5920. The Nasdaq Capital Market
[FR Doc. 2011–1435 Filed 1–24–11; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–63732; File No. SR–
NASDAQ–2011–007]
Self-Regulatory Organizations; The
NASDAQ Stock Market LLC; Notice of
Filing and Immediate Effectiveness of
a Proposed Rule Change To Impose a
Quarterly Maximum on the Listing of
Additional Shares Fees Payable by
Closed-End Funds
mstockstill on DSKH9S0YB1PROD with NOTICES
January 19, 2011.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
11 In
approving this proposed rule change, the
Commission has considered the proposed rule’s
impact on efficiency, competition, and capital
formation. See 15 U.S.C. 78c(f).
12 15 U.S.C. 78f(b)(5).
13 17 CFR 200.30–3(a)(12).
VerDate Mar<15>2010
18:40 Jan 24, 2011
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I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
Nasdaq proposes to impose a
quarterly maximum on the listing of
additional shares fees payable by
Closed-End Funds. Nasdaq will
implement the proposed rule change
immediately.
The text of the proposed rule change
is below. Proposed new language is in
italics.
5910. The NASDAQ Global Market
(a) No change.
(b) Additional Shares
(1)–(5) No change.
(6) The maximum fee charged to an
issuer that is a Closed-End Fund in any
quarter is $25,000 per Company.
(c)–(f) No change.
(a) No change.
(b) Additional Shares
(1)–(5) No change.
(6) The maximum fee charged to an
issuer that is a Closed-End Fund in any
quarter is $25,000 per Company.
(c)—(e) No change.
*
*
*
*
*
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.
1 15
2 17
PO 00000
U.S.C. 78s(b)(1).
CFR 240.19b–4.
Frm 00124
Fmt 4703
Sfmt 4703
4401
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
Nasdaq currently assesses a fee for
listing additional shares of an already
listed class in the amount of $5,000 or
$0.01 per additional share, whichever is
higher, up to an annual maximum of
$65,000 per listed company.3 There is
no fee assessed for issuances of less than
50,000 shares per quarter.4 This fee
applies to both operating companies and
closed-end companies (‘‘Closed-End
Funds’’).
A Closed-End Fund is a type of
company regulated under the
Investment Company Act of 1940.5
Generally, a Closed-End Fund sells a
fixed number of shares and invests the
proceeds in investments chosen by its
investment adviser to achieve the funds
stated investment objectives.
Shareholders have an interest in the
fund’s investments, but generally cannot
redeem shares from the fund. Instead,
the Closed-End Fund’s shares are listed
and trade at a value which may be
greater or less than the fund’s assets.
Unlike operating companies, a ClosedEnd Fund is not taxed on its income so
long as it generates at least 90% of its
income from permissible sources,
including dividends on and gains from
the sale of stock or securities, and
distributes that income to its
shareholders.6 As a consequence, a
Closed-End Fund generally distributes
all of its income annually and does not
have access to retained earnings for new
investment opportunities. A Closed-End
Fund, therefore, frequently needs to
issue additional shares to raise new
capital in order to fund such
opportunities. This is in contrast to
operating companies, which generally
have access to retained earnings to
acquire new assets, and as a
consequence are not limited to issuing
shares.
Given the unique nature of ClosedEnd Funds, Nasdaq believes it is
appropriate to provide them relief from
the fee for listing additional shares in
the form of a $25,000 quarterly limit.
The quarterly maximum will reduce the
likelihood of reaching the existing
$65,000 annual limit and eliminate the
possibility of reaching the annual
maximum with a single capital raise or
3 See Nasdaq Listing Rule 5910(b), applicable to
Nasdaq Global and Global Select Market companies
and Nasdaq Listing Rule 5920(b), applicable to
Nasdaq Capital Market companies.
4 Id.
5 15 U.S.C. 80a–5.
6 26 U.S.C. 851—856.
E:\FR\FM\25JAN1.SGM
25JAN1
]]>Agencies
[Federal Register Volume 76, Number 16 (Tuesday, January 25, 2011)]
[Notices]
[Pages 4400-4401]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-1435]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-63731; File No. SR-BX-2010-083]
Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Order
Approving a Proposed Rule Change Relating to the Price Improvement
Period To Permit an Initiating Participant To Designate a PIP Surrender
Quantity
January 19, 2011.
On November 24, 2010, NASDAQ OMX BX, Inc. (the ``Exchange'') filed
with the Securities and Exchange Commission (``Commission''), pursuant
to Section 19(b)(1) of the Securities Exchange Act of 1934 (``Act'')
\1\ and Rule 19b-4 thereunder,\2\ a proposed rule change to the Rules
of the Boston Options Exchange Group, LLC (``BOX'') to permit an
Options Participant initiating a Price Improvement Period (``PIP'') to
designate a PIP Surrender Quantity. Notice of the proposed rule change
was published for comment in the Federal Register on December 8,
2010.\3\ The Commission received no comments on the proposal.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ See Securities Exchange Act Release No. 63416 (December 2,
2010), 75 FR 76503.
---------------------------------------------------------------------------
Currently, the BOX rules that govern the PIP (``PIP Rules'') \4\
generally allow an Options Participant initiating a PIP (``Initiating
Participant'') to retain priority and trade allocation privileges for
forty percent (40%) of the size of a PIP Order upon conclusion of the
PIP auction.\5\ This proposed rule change will permit an Initiating
Participant, when starting a PIP auction, to submit the Primary
Improvement Order to BOX with a designation to specify a quantity of
contracts that it is willing to ``surrender'' from the number of
contracts to which it is entitled to other Options Participants (``PIP
Surrender Quantity'').\6\ By designating a PIP Surrender Quantity, the
Initiating Participant could potentially be allocated less than the
forty percent (40%) to which it may be entitled under BOX Rules.\7\
---------------------------------------------------------------------------
\4\ See Chapter V, Section 18 of the Rules of the Boston Options
Exchange Group, LLC (``BOX Rules'').
\5\ See id., paragraphs f(i)-f(ii).
\6\ The Initiating Participant would specify the PIP Surrender
Quantity as a number of contracts, not as a percentage of the total
PIP Order. Telephone conversation between Michael Burbach, Vice
President of Legal Affairs, BOX and Ira Brandriss, Special Counsel,
Division of Trading and Markets, Commission, January 13, 2011.
\7\ The Primary Improvement Order would also still yield
priority to certain competing orders in certain circumstances. See
PIP Rules, supra note 4, paragraph (f)(iii). In the case of a Max
Improvement Primary Improvement Order, see subsection (e)(ii) of the
PIP Rules, the Surrender Quantity would be deducted from the number
of contracts, if any, remaining for the Initiating Participant at
the last level of allocation--i.e., from the 40% share to which the
Initiating Participant is entitled at that level--and ceded to any
other Options Participants at that level. Thus it is possible, under
the proposed rule change, that if the Surrender Quantity is greater
than the number of contracts remaining for the Initiating
Participant at the last level of allocation, the Initiating
Participant will receive no contracts at that level. Telephone
conversation between Michael Burbach, Vice President of Legal
Affairs, BOX, and Ira Brandriss, Special Counsel and Nicholas
Shwayri, Attorney-Advisor, Division of Trading and Markets,
Commission, January 19, 2011.
---------------------------------------------------------------------------
The proposed rule change further makes clear that in no case shall
the Initiating Participant's use of the Surrender Quantity function
result in an allocation to the Initiating Participant that would be
greater than the maximum allowable allocation the Initiating
Participant would otherwise receive in accordance with the allocation
procedures set forth in the PIP Rules.\8\ The proposal specifies that
the PIP Surrender Quantity shall not be effective for an amount that is
lesser than or equal to sixty percent (60%) of the size of the PIP
Order.
---------------------------------------------------------------------------
\8\ See, generally id., paragraph (f).
---------------------------------------------------------------------------
Additionally, the proposed rule change will modify the BOX Trading
Host's trade allocation at the conclusion of the PIP auction to account
for the PIP Surrender Quantity. The proposal specifies that when the
BOX Trading Host determines the priority and trade allocation amounts
for the Initiating Participant upon the conclusion of the PIP auction,
the Trading Host will automatically adjust the trade allocations to the
other PIP Participants according to the priority set forth generally in
the PIP Rules,\9\ providing a total amount to the other PIP
Participants up to the PIP Surrender Quantity. Under the proposal, the
Primary Improvement Order is allocated the remaining size of the PIP
Order, if any. If the aggregate size of other PIP Participants' contra
orders is not equal to or greater than the PIP Surrender Quantity, then
the remaining PIP Surrender Quantity shall be left unfilled by those
participants and the Primary Improvement Order shall be allocated the
remaining size of the PIP Order as set forth in the PIP Rules.\10\ The
Exchange has stated that it will provide Options Participants with
three (3) business days notice, via Information Circular, about the
implementation date of the PIP Surrender Quantity prior to
[[Page 4401]]
its implementation in the BOX trading system.
---------------------------------------------------------------------------
\9\ See id., paragraph (e).
\10\ See id., paragraph (f).
---------------------------------------------------------------------------
After careful review, the Commission finds that the proposed rule
change is consistent with the requirements of the Act and the rules and
regulations thereunder applicable to a national securities
exchange.\11\ In particular, the Commission finds that the proposed
rule change is consistent with the requirements of Section 6(b)(5) of
the Act,\12\ which requires, among other things, that the rules of a
national securities exchange be designed to prevent fraudulent and
manipulative acts and practices, to promote just and equitable
principles of trade, 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. The Commission
believes that Initiating Participant's use of the Surrender Quantity
function could benefit investors by allowing an Initiating Participant
the flexibility to designate a lower amount than the forty percent
(40%) of the PIP Order to which the Initiating Participant is entitled,
thereby providing the other PIP Participants with the opportunity to
receive increased trade allocations.
---------------------------------------------------------------------------
\11\ In approving this proposed rule change, the Commission has
considered the proposed rule's impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
\12\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
It is therefore ordered, pursuant to Section 19(b)(2) of the Act,
that the proposed rule change (SR-BX-2010-083), be and hereby is
approved.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\13\
---------------------------------------------------------------------------
\13\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011-1435 Filed 1-24-11; 8:45 am]
BILLING CODE 8011-01-P
