Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Codify the Collection of the Covered Sales Fee, 28256-28257 [2011-11917]

Download as PDF 28256 Federal Register / Vol. 76, No. 94 / Monday, May 16, 2011 / Notices 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 the filing will also be available for inspection and copying at the principal office of NASDAQ. 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–2011–062, and should be submitted on or before June 6, 2011. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.11 Cathy H. Ahn, Deputy Secretary. [FR Doc. 2011–11860 Filed 5–13–11; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–64457; File No. SR–BX– 2011–024] Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Codify the Collection of the Covered Sales Fee erowe on DSK5CLS3C1PROD with NOTICES May 10, 2011. 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 May 2, 2011, NASDAQ OMX BX, Inc. (‘‘BX’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (the ‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items have been prepared by the Exchange. The Exchange filed the proposed rule change pursuant to Section 19(b)(3)(A)(ii) of the Act 3 and Rule 19b–4(f)(2) 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 from interested persons. 11 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 15 U.S.C. 78s(b)(3)(A)(ii). 4 17 CFR 240.19b–4(f)(2). 1 15 VerDate Mar<15>2010 15:14 May 13, 2011 I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend Chapter V, Sec. 2 (Fees and Charges) of the Rules of the Boston Options Exchange Group, LLC (‘‘BOX’’) to codify the collection of the Covered Sales Fee. The text of the proposed rule change is available at the principal office of the Exchange, the Commission’s Public Reference Room, on the Commission’s Web site at http://www.sec.gov, and also on the Exchange’s Internet Web site at http://nasdaqomxbx.cchwallstreet.com/ NASDAQOMXBX/Filings/. 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 self-regulatory organization 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 self-regulatory organization 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 Pursuant to Section 31 of the Securities and Exchange Act of 1934 (‘‘the Act’’) 5 and Rule 31 thereunder,6 national securities exchanges and associations (collectively, ‘‘SROs’’) are required to pay a transaction fee to the Securities and Exchange Commission (‘‘Commission’’) that is designed to recover the costs related to the government’s supervision and regulation of the securities markets and securities professionals. To offset this obligation, Participants are assessed charges in connection with satisfaction of the Exchange’s payment obligations under Section 31. This fee is collected indirectly from Participants through their clearing firms by the Options Clearing Corporation (‘‘OCC’’) on behalf of the Exchange. The fee defrays the cost of the Section 31 fee triggered by the covered sale. The fee assessed to a Participant is equal to the Section 31 fee assessed by the Commission for the covered sale. The fee is collected by billing the Participant’s designated 5 15 6 17 Jkt 223001 PO 00000 U.S.C. 78ee. CFR 240.31. Frm 00048 Fmt 4703 Sfmt 4703 clearing firm for the amount owed by the Participant to the Exchange. Assessing a sale fee is common practice among national exchanges.7 The Exchange is now proposing to codify this process by adopting the proposed Section 2(c) to Chapter V of the BOX Trading Rules. This proposed amendment codifies that the fee now referred to as the Covered Sale Fee is collected indirectly from Options Participants through their clearing firms by a designated clearing agency, as defined by the Act, on behalf of the Exchange and that to the extent there may be any excess monies collected under this Rule, the Exchange may retain those monies to help fund its general operating expenses. In addition, newly proposed Section 2(c) sets forth and explains the circumstances when a Covered Sale Fee is assessed by the Exchange to an Options Participant as follows: (i) When a sale in option securities occurs with respect to which the Exchange is obligated to pay a fee to the Commission under Section 31 of the Act; and (2) when a sell order in option securities is routed for execution at an away market other than on BOX, resulting in a covered sale on that market and an obligation of the Routing Broker providing routing services for BOX, as described in Chapter XII, Sec. 5, Supp. Material .01 of the BOX Trading Rules, to pay the related sales fee of that away market.8 Finally, the Exchange proposes to reletter the remainder of Section 2. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with the objectives of Section 6 of the Act,9 in general, and furthers the objectives of Section (b)(4),10 in particular, in that it 7 See e.g. International Securities Exchange (‘‘ISE’’) Rule 212 and NASDAQ OMX PHLX (‘‘PHLX’’) Rule 607. 8 Sell orders in options securities entered into BOX that are routed to another market for execution, however, do not result in a covered sale on the Exchange. Execution of such routed orders is facilitated by Routing Broker(s), which executes the routed order on the away market on behalf of the Participant. Such routed sell orders result in a covered sale on the away market, which incurs a Section 31 fee obligation. The away market assesses a sale fee on the Routing Broker to defray the cost of the Section 31 fee obligation. In turn, as proposed, the Exchange will assess the Participant, the original selling party, a Covered Sale Fee to defray the cost of the Section 31 fee passed on by the away market pursuant to its sale fee. As such, the Exchange’s Covered Sale Fee offsets the sale fee the Routing Broker(s) is assessed by the away market, and BOX reimburses the amounts paid by the Routing Broker(s) to the away markets, the result of which is to place the parties involved in the transaction in the same position as if the covered sale had occurred on the Exchange. 9 15 U.S.C. 78f. 10 15 U.S.C. 78f(b)(4). E:\FR\FM\16MYN1.SGM 16MYN1 Federal Register / Vol. 76, No. 94 / Monday, May 16, 2011 / Notices is designed to provide for the equitable allocation of reasonable dues, fees and other charges among its Participants and other persons using the facilities. The proposed rule is codifying a practice currently employed by Exchange and the OCC. By adopting this rule, the Exchange is providing Participants with a description of the Covered Sale Fee and the process by which the Covered Sale Fee is collected. 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 The foregoing rule change has become effective pursuant to Section 19(b)(3)(A)(ii) of the Exchange Act 11 and Rule 19b–4(f)(2) thereunder,12 because it establishes or changes a due, fee, or other charge applicable only to a member. 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. 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: Paper Comments • Send paper comments in triplicate to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549–1090. erowe on DSK5CLS3C1PROD with NOTICES U.S.C. 78s(b)(3)(A)(ii). CFR 240.19b–4(f)(2). VerDate Mar<15>2010 15:14 May 13, 2011 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 See Securities Exchange Act Release No. 64143 (March 29, 2011), 76 FR 18589 (April 4, 2011) (‘‘Notice’’). 2 17 13 17 Jkt 223001 [Release No. 34–64463; File No. SR– NASDAQ–2011–037] A. Elimination of the Order Imbalance Tie-Breaker and Modification of the Mid-Point Tie-Breaker NOM currently employs a series of tie-breakers that resolve instances where multiple prices satisfy the conditions for • Use the Commission’s Internet comment form (http://www.sec.gov/ rules/sro.shtml); or • Send an e-mail to rulecomments@sec.gov. Please include File Number SR–BX–2011–024 on the subject line. 12 17 SECURITIES AND EXCHANGE COMMISSION Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Order Approving Proposed Rule Change To All submissions should refer to File Modify Chapter V, Section 4 and Number SR–BX–2011–024. This file Chapter VI, Section 8 of the number should be included on the subject line if e-mail is used. To help the Exchange’s Rules Relating to Opening and Halt Crosses on the NASDAQ Commission process and review your Options Market comments more efficiently, please use only one method. The Commission will May 11, 2011. post all comments on the Commission’s I. Introduction Internet Web site (http://www.sec.gov/ On March 15, 2011, The NASDAQ rules/sro.shtml). Copies of the Stock Market LLC (‘‘NASDAQ’’ or submission, all subsequent ‘‘Exchange’’) filed with the Securities amendments, all written statements and Exchange Commission with respect to the proposed rule (‘‘Commission’’), pursuant to Section change that are filed with the 19(b)(1) of the Securities Exchange Act Commission, and all written of 1934 (‘‘Act’’),1 and Rule 19b-4 communications relating to the thereunder,2 a proposed rule change to proposed rule change between the modify the procedures for the opening Commission and any person, other than of trading at the start of the trading day those that may be withheld from the and at the resumption of trading public in accordance with the following a trading halt on the NASDAQ provisions of 5 U.S.C. 552, will be Options Market (‘‘NOM’’). The proposed available for Web site viewing and rule change was published for comment printing in the Commission’s Public in the Federal Register on April 4, Reference Room, 100 F Street, NE., 2011.3 The Commission received no comment letters regarding the proposal. Washington, DC 20549, on official This order approves the proposed rule business days between the hours of 10 change. a.m. and 3 p.m. Copies of such filing also will be available for inspection and II. Description of the Proposal copying at the principal office of the The Exchange proposes to modify Exchange. All comments received will Chapter V, Section 4 and Chapter VI, be posted without change; the Section 8 of the Exchange’s rules (‘‘NOM Commission does not edit personal Rules’’) governing the opening of trading identifying information from at the start of the trading day and at the submissions. You should submit only resumption of trading following a information that you wish to make trading halt on NOM. Specifically, the available publicly. All submissions Exchange proposes to: (1) Eliminate one should refer to File Number SR–BX– tie-breaker and modify a second tie2011–024 and should be submitted on breaker used to establish the Current or before June 6, 2011. Reference Price and cross price; (2) modify the circumstances whereby the For the Commission, by the Division of Exchange disseminates an indicative Trading and Markets, pursuant to delegated indicator of ‘‘market;’’ (3) change the authority.13 start time for imbalance and indicative Cathy H. Ahn, data dissemination; (4) clarify when an Deputy Secretary. Order Imbalance Indicator is [FR Doc. 2011–11917 Filed 5–13–11; 8:45 am] disseminated; and (5) establish a halt BILLING CODE 8011–01–P cross. Electronic Comments 11 15 28257 PO 00000 CFR 200.30–3(a)(12). Frm 00049 Fmt 4703 Sfmt 4703 E:\FR\FM\16MYN1.SGM 16MYN1

Agencies

[Federal Register Volume 76, Number 94 (Monday, May 16, 2011)]
[Notices]
[Pages 28256-28257]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-11917]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-64457; File No. SR-BX-2011-024]


Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change To Codify 
the Collection of the Covered Sales Fee

May 10, 2011.
    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 May 2, 2011, NASDAQ OMX BX, Inc. (``BX'' or ``Exchange'') filed with 
the Securities and Exchange Commission (the ``Commission'') the 
proposed rule change as described in Items I and II below, which Items 
have been prepared by the Exchange. The Exchange filed the proposed 
rule change pursuant to Section 19(b)(3)(A)(ii) of the Act \3\ and Rule 
19b-4(f)(2) 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 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)(ii).
    \4\ 17 CFR 240.19b-4(f)(2).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend Chapter V, Sec. 2 (Fees and Charges) 
of the Rules of the Boston Options Exchange Group, LLC (``BOX'') to 
codify the collection of the Covered Sales Fee. The text of the 
proposed rule change is available at the principal office of the 
Exchange, the Commission's Public Reference Room, on the Commission's 
Web site at http://www.sec.gov, and also on the Exchange's Internet Web 
site at http://nasdaqomxbx.cchwallstreet.com/NASDAQOMXBX/Filings/.

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 self-regulatory organization 
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 self-regulatory organization 
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
    Pursuant to Section 31 of the Securities and Exchange Act of 1934 
(``the Act'') \5\ and Rule 31 thereunder,\6\ national securities 
exchanges and associations (collectively, ``SROs'') are required to pay 
a transaction fee to the Securities and Exchange Commission 
(``Commission'') that is designed to recover the costs related to the 
government's supervision and regulation of the securities markets and 
securities professionals. To offset this obligation, Participants are 
assessed charges in connection with satisfaction of the Exchange's 
payment obligations under Section 31. This fee is collected indirectly 
from Participants through their clearing firms by the Options Clearing 
Corporation (``OCC'') on behalf of the Exchange. The fee defrays the 
cost of the Section 31 fee triggered by the covered sale. The fee 
assessed to a Participant is equal to the Section 31 fee assessed by 
the Commission for the covered sale. The fee is collected by billing 
the Participant's designated clearing firm for the amount owed by the 
Participant to the Exchange. Assessing a sale fee is common practice 
among national exchanges.\7\
---------------------------------------------------------------------------

    \5\ 15 U.S.C. 78ee.
    \6\ 17 CFR 240.31.
    \7\ See e.g. International Securities Exchange (``ISE'') Rule 
212 and NASDAQ OMX PHLX (``PHLX'') Rule 607.
---------------------------------------------------------------------------

    The Exchange is now proposing to codify this process by adopting 
the proposed Section 2(c) to Chapter V of the BOX Trading Rules. This 
proposed amendment codifies that the fee now referred to as the Covered 
Sale Fee is collected indirectly from Options Participants through 
their clearing firms by a designated clearing agency, as defined by the 
Act, on behalf of the Exchange and that to the extent there may be any 
excess monies collected under this Rule, the Exchange may retain those 
monies to help fund its general operating expenses. In addition, newly 
proposed Section 2(c) sets forth and explains the circumstances when a 
Covered Sale Fee is assessed by the Exchange to an Options Participant 
as follows: (i) When a sale in option securities occurs with respect to 
which the Exchange is obligated to pay a fee to the Commission under 
Section 31 of the Act; and (2) when a sell order in option securities 
is routed for execution at an away market other than on BOX, resulting 
in a covered sale on that market and an obligation of the Routing 
Broker providing routing services for BOX, as described in Chapter XII, 
Sec. 5, Supp. Material .01 of the BOX Trading Rules, to pay the related 
sales fee of that away market.\8\
---------------------------------------------------------------------------

    \8\ Sell orders in options securities entered into BOX that are 
routed to another market for execution, however, do not result in a 
covered sale on the Exchange. Execution of such routed orders is 
facilitated by Routing Broker(s), which executes the routed order on 
the away market on behalf of the Participant. Such routed sell 
orders result in a covered sale on the away market, which incurs a 
Section 31 fee obligation. The away market assesses a sale fee on 
the Routing Broker to defray the cost of the Section 31 fee 
obligation. In turn, as proposed, the Exchange will assess the 
Participant, the original selling party, a Covered Sale Fee to 
defray the cost of the Section 31 fee passed on by the away market 
pursuant to its sale fee. As such, the Exchange's Covered Sale Fee 
offsets the sale fee the Routing Broker(s) is assessed by the away 
market, and BOX reimburses the amounts paid by the Routing Broker(s) 
to the away markets, the result of which is to place the parties 
involved in the transaction in the same position as if the covered 
sale had occurred on the Exchange.
---------------------------------------------------------------------------

    Finally, the Exchange proposes to reletter the remainder of Section 
2.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the objectives of Section 6 of the Act,\9\ in general, and 
furthers the objectives of Section (b)(4),\10\ in particular, in that 
it

[[Page 28257]]

is designed to provide for the equitable allocation of reasonable dues, 
fees and other charges among its Participants and other persons using 
the facilities. The proposed rule is codifying a practice currently 
employed by Exchange and the OCC. By adopting this rule, the Exchange 
is providing Participants with a description of the Covered Sale Fee 
and the process by which the Covered Sale Fee is collected.
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78f.
    \10\ 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 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

    The foregoing rule change has become effective pursuant to Section 
19(b)(3)(A)(ii) of the Exchange Act \11\ and Rule 19b-4(f)(2) 
thereunder,\12\ because it establishes or changes a due, fee, or other 
charge applicable only to a member.
---------------------------------------------------------------------------

    \11\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \12\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------

    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.

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 (http://www.sec.gov/rules/sro.shtml); or
     Send an e-mail to rule-comments@sec.gov. Please include 
File Number SR-BX-2011-024 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-2011-024. 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 (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 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-2011-024 and should be 
submitted on or before June 6, 2011.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
---------------------------------------------------------------------------

    \13\ 17 CFR 200.30-3(a)(12).
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Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011-11917 Filed 5-13-11; 8:45 am]
BILLING CODE 8011-01-P