Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Modify Fees for Members Using the NASDAQ Options Market, 57776-57778 [2011-23722]

Download as PDF 57776 Federal Register / Vol. 76, No. 180 / Friday, September 16, 2011 / Notices quotation requirements. The Exchange believes that the proposed optional functionality to assist Exchange Market Makers in maintaining continuous, twosided quotations in the securities in which they are registered will encourage Market Makers to remain registered with and trade on the Exchange, thus providing valuable liquidity to the Exchange. At the same time, the Exchange believes that the proposed functionality will keep Exchangegenerated quotations within reasonable reach of the NBBO. In addition, the proposed addition of Rule 11.21(a)(1) to the Exchange’s MRVP will give the Exchange the ability to promptly impose a meaningful financial penalty for such violations before there is a need for more serious enforcement action. B. Self-Regulatory Organization’s Statement on Burden on Competition The proposed rule change does not impose any burden on competition that is 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 not solicited, and does not intend to solicit, comments on this proposed rule change. The Exchange has not received any unsolicited written comments from members or other interested parties. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action mstockstill on DSK4VPTVN1PROD with NOTICES Within 45 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 or disapprove 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: VerDate Mar<15>2010 16:26 Sep 15, 2011 Jkt 223001 Electronic Comments • 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 No. SR–EDGX–2011–28 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. SECURITIES AND EXCHANGE COMMISSION [Release No. 34–65318; File No. SR– NASDAQ–2011–124] Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Modify Fees for Members Using the NASDAQ Options Market September 12, 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 September 6, 2011, The NASDAQ Stock All submissions should refer to File Market LLC (‘‘NASDAQ’’ or the Number SR–EDGX–2011–28. This file ‘‘Exchange’’) filed with the Securities number should be included on the and Exchange Commission subject line if e-mail is used. To help the (‘‘Commission’’) the proposed rule Commission process and review your change as described in Items I, II, and comments more efficiently, please use III below, which Items have been only one method. The Commission will prepared by NASDAQ. The Commission post all comments on the Commissions is publishing this notice to solicit Internet Web site (http://www.sec.gov/ comments on the proposed rule change rules/sro.shtml). Copies of the from interested persons. submission, all subsequent I. Self-Regulatory Organization’s amendments, all written statements Statement of the Terms of the Substance with respect to the proposed rule of the Proposed Rule Change change that are filed with the NASDAQ proposes to modify pricing Commission, and all written for NASDAQ members using the communications relating to the NASDAQ Market Center. NASDAQ will proposed rule change between the implement the proposed change on Commission and any person, other than September 6, 2011. The text of the those that may be withheld from the proposed rule change is available at public in accordance with the http://nasdaq.cchwallstreet.com/, at provisions of 5 U.S.C. 552, will be NASDAQ’s principal office, and at the available for Web site viewing and Commission’s Public Reference Room. printing in the Commission’s Public II. Self-Regulatory Organization’s Reference Room. Copies of such filing also will be available for inspection and Statement of the Purpose of, and Statutory Basis for, the Proposed Rule copying at the principal office of the Change Exchange. All comments received will In its filing with the Commission, be posted without change; the NASDAQ included statements Commission does not edit personal concerning the purpose of and basis for identifying information from the proposed rule change and discussed submissions. You should submit only any comments it received on the information that you wish to make proposed rule change. The text of these available publicly. All submissions statements may be examined at the should refer to File Number SR–EDGX– places specified in Item IV below. 2011–28 and should be submitted by NASDAQ has prepared summaries, set October 7, 2011. forth in Sections A, B, and C below, of For the Commission, by the Division of the most significant aspects of such Trading and Markets, pursuant to delegated statements. authority.15 Elizabeth M. Murphy, Secretary. [FR Doc. 2011–23772 Filed 9–15–11; 8:45 am] BILLING CODE 8011–01–P A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose NASDAQ is proposing to modify Rule 7050 governing the rebates and fees 1 15 15 17 PO 00000 CFR 200.30–3(a)(12). Frm 00065 Fmt 4703 Sfmt 4703 2 17 E:\FR\FM\16SEN1.SGM U.S.C. 78s(b)(1). CFR 240.19b–4. 16SEN1 Federal Register / Vol. 76, No. 180 / Friday, September 16, 2011 / Notices assessed for option orders entered into NOM. Specifically, NASDAQ is proposing to modify pricing for the Customer Rebate to Add Liquidity in Penny Options by adding an additional volume achievement to earn an enhanced rebate. The Exchange currently pays a Customer Rebate to Add Liquidity in Penny Options based on six volume tiers as follows: Rebate to add liquidity Monthly volume Tier Tier Tier Tier Tier 1 2 3 4 5 ........................................ ........................................ ........................................ ........................................ ........................................ Tier 6 ........................................ Participant adds Customer liquidity of up to 24,999 contracts per day in a month ................... Participant adds Customer liquidity of 25,000—59,999 contracts per day in a month .............. Participant adds Customer liquidity of 60,000–124,999 contracts per day in a month ............. Participant adds Customer liquidity of 125,000 or more contracts per day in a month ............. Participant adds (1) Customer liquidity of 60,000 or more contracts per day in a month, and (2) NOM Market Maker liquidity of 60,000 or more contracts per day in a month. Participant adds Customer liquidity of 25,000 or more contracts per day in a month, and (2) the Participant simultaneously qualifies for credit under the Investor Support Program set forth in Rule 7014. To further encourage firms that route Customer orders to increase Customer order flow to the Exchange, the Exchange is proposing to modify the Customer Rebates to Add Liquidity in Penny Pilot by adding a monthly volume target for NOM Participants that qualify for Tiers 2 and 6. Specifically, firms that qualify for Tier 2 by adding Customer Liquidity in Penny Options of 25,000 to 59,999 contracts per day for the month, can receive an additional $0.02 rebate by contributing 750,000 contracts of Customer Liquidity in Penny Options between September 6 and September 30, 2011. Also, firms that qualify for Tier 6 by adding Customer Liquidity in Penny Options of 25,000 or more contracts per day for the month and also qualifying for a credit under NASDAQ’s Investor Support Program (set forth in Rule 7014),3 can receive an additional $0.02 rebate by contributing 750,000 contracts of Customer Liquidity in Penny Options between September 6 and September 30, 2011. NOM Participants that qualify for these two new tiers will receive an additional $0.02 rebate only for executions occurring between September 6 and September 30, 2011; volume executed on September 1, 2011 and September 2, 2011 will not be eligible. mstockstill on DSK4VPTVN1PROD with NOTICES 2. Statutory Basis NASDAQ believes that the proposed rule changes are consistent with the provisions of Section 6 of the Act,4 in 3 For a detailed description of the Investor Support Program, see Securities Exchange Act Release No. 63270 (November 8, 2010), 75 FR 69489 (November 12, 2010) (NASDAQ–2010–141) (notice of filing and immediate effectiveness) (the ‘‘ISP Filing’’). See also Securities Exchange Act Release Nos. 63414 (December 2, 2010), 75 FR 76505 (December 8, 2010) (NASDAQ–2010–153) (notice of filing and immediate effectiveness); and 63628 (January 3, 2011), 76 FR 1201 (January 7, 2011) (NASDAQ–2010–154) (notice of filing and immediate effectiveness). 4 15 U.S.C. 78f. VerDate Mar<15>2010 16:26 Sep 15, 2011 57777 Jkt 223001 general, and with Section 6(b)(4) of the Act,5 in particular, in that it provides for the equitable allocation of reasonable dues, fees and other charges among members and issuers and other persons using any facility or system which NASDAQ operates or controls. The Exchange believes that the proposed new pricing tiers are equitable, reasonable and not unfairly discriminatory because they continue an existing program to encourage brokerdealers acting as agent for Customer orders to select the Exchange as a venue to post Customer orders. The Exchange believes that its success at attracting Customer order flow benefits all market participants by improving the quality of order interaction and executions at the Exchange. The Exchange further believes that limiting the new tiers to firms already qualifying for Tiers 2 and 6 (and not those that qualify for Tier 3, 4 and 5) is equitable and not unfairly discriminatory because NOM Participants in Tiers 3, 4, and 5 already earn a higher rebate. For example, a NOM Participant that qualify [sic] for the new tiers will receive a rebate of either $0.36 or $0.37 per contract, whereas NOM Participants that qualify for Tiers 3, 4 and 5 receive a $0.38 per contract rebate. The Exchange believes that the proposed new pricing tiers for Customer Rebates to Add Liquidity in Penny Options is equitable and not unfairly discriminatory because the Exchange will uniformly pay a Rebate to Add Liquidity to Customers executing Penny Options based on the 750,000 volume target and monthly tiers proposed and discussed herein. The Exchange operates in a highly competitive market comprised of nine U.S. options exchanges in which sophisticated and knowledgeable market participants can and do send 5 15 PO 00000 U.S.C. 78f(b)(4). Frm 00066 Fmt 4703 $0.35 order flow to competing exchanges if they deem fee levels at a particular exchange to be excessive or rebate opportunities to be inadequate. The Exchange believes that the proposed rebate scheme is competitive and similar to other rebates and tiers opportunities in place on other exchanges. The Exchange believes that this competitive marketplace materially impacts the rebates present on the Exchange today and substantially influenced the proposal set forth above. B. Self-Regulatory Organization’s Statement on Burden on Competition NASDAQ does not believe that the proposed rule change will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act, as amended. Because the market for order execution is extremely competitive, members may readily opt to disfavor NASDAQ’s execution services if they believe that alternatives offer them better value. For this reason and the reasons discussed in connection with the statutory basis for the proposed rule change, the Exchange does not believe that the proposed changes will impair the ability of members or competing order execution venues to maintain their competitive standing in the financial markets. 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 The foregoing rule change has become effective pursuant to Section 19(b)(3)(A)(ii) of the Act.6 At any time 6 15 Sfmt 4703 $0.26 $0.34 $0.38 $0.40 $0.40 E:\FR\FM\16SEN1.SGM U.S.C. 78s(b)(3)(a)(ii). 16SEN1 57778 Federal Register / Vol. 76, No. 180 / Friday, September 16, 2011 / Notices 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. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved. 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 No. SR–NASDAQ– 2011–124 and should be submitted on or before October 7, 2011. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.7 Elizabeth M. Murphy, Secretary. [FR Doc. 2011–23722 Filed 9–15–11; 8:45 am] Electronic Comments • 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–NASDAQ–2011–124 on the subject line. mstockstill on DSK4VPTVN1PROD with NOTICES 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: Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Modify Fees for Members Using the NASDAQ Options Market 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–NASDAQ–2011–124. 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 VerDate Mar<15>2010 16:26 Sep 15, 2011 Jkt 223001 BILLING CODE 8011–01–P 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 SECURITIES AND EXCHANGE COMMISSION [Release No. 34–65317; File No. SR– NASDAQ–2011–127] NASDAQ is proposing to modify Rule 7050 governing the rebates and fees assessed for option orders entered into NOM. Specifically, NASDAQ is proposing to modify pricing for the Customer Rebate to Add Liquidity in Penny Options to revising [sic] existing monthly volume tiers. The Exchange currently pays a Customer Rebate to Add Liquidity in Penny Options based on four volume tiers as follows: Monthly volume September 12, 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 September 1, 2011, The NASDAQ Stock Market LLC (‘‘NASDAQ’’ or 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 NASDAQ. 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 the Substance of the Proposed Rule Change NASDAQ proposes to modify pricing for NASDAQ members using the NASDAQ Market Center. NASDAQ will implement the proposed change on September 1, 2011. The text of the proposed rule change is available at http://nasdaq.cchwallstreet.com/, at NASDAQ’s principal office, 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, NASDAQ included statements 7 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 PO 00000 Frm 00067 Fmt 4703 Sfmt 4703 Tier 1 ..... Tier 2 ..... Tier 3 ..... Tier 4 ..... Rebate to add liquidity 0–499,999 ........ 500,000– 799,999. 800,000– 1,199,999. 1,200,000 and up. $0.26 0.32 0.36 0.38 By way of example, the Exchange currently pays a Rebate to Add Liquidity of $0.36 per contract to a NOM Participant that executed 900,000 Customer contracts that added liquidity in Penny Options in a given month. If the NOM Participant executed 1,500,000 Customer contracts that added liquidity in Penny Options in a given month, the Exchange currently would pay a Rebate to Add Liquidity of $0.38 per contract. The Exchange believes the existing monthly volume thresholds have incentivized firms that route Customer orders to the Exchange to increase Customer order flow to the Exchange. To further encourage firms that route Customer orders to increase Customer order flow to the Exchange, the Exchange is proposing to modify the Customer Rebates to Add Liquidity in Penny Pilot Options in several ways. First, the Exchange is converting all tier measurements to average daily volumes from aggregate monthly volumes. This change is not, in and of itself, a material change. Second, based on its experience with the existing volume tiers, the Exchange is modifying the volume required to E:\FR\FM\16SEN1.SGM 16SEN1

Agencies

[Federal Register Volume 76, Number 180 (Friday, September 16, 2011)]
[Notices]
[Pages 57776-57778]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-23722]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-65318; File No. SR-NASDAQ-2011-124]


Self-Regulatory Organizations; The NASDAQ Stock Market LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Modify Fees for Members Using the NASDAQ Options Market

September 12, 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 September 6, 2011, The NASDAQ Stock Market LLC (``NASDAQ'' or 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 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 the 
Substance of the Proposed Rule Change

    NASDAQ proposes to modify pricing for NASDAQ members using the 
NASDAQ Market Center. NASDAQ will implement the proposed change on 
September 6, 2011. The text of the proposed rule change is available at 
http://nasdaq.cchwallstreet.com/, at NASDAQ's principal office, 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, 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
    NASDAQ is proposing to modify Rule 7050 governing the rebates and 
fees

[[Page 57777]]

assessed for option orders entered into NOM. Specifically, NASDAQ is 
proposing to modify pricing for the Customer Rebate to Add Liquidity in 
Penny Options by adding an additional volume achievement to earn an 
enhanced rebate. The Exchange currently pays a Customer Rebate to Add 
Liquidity in Penny Options based on six volume tiers as follows:

----------------------------------------------------------------------------------------------------------------
                                                                                                  Rebate to add
                                                                 Monthly volume                     liquidity
----------------------------------------------------------------------------------------------------------------
Tier 1........................................  Participant adds Customer liquidity of up to               $0.26
                                                 24,999 contracts per day in a month.
Tier 2........................................  Participant adds Customer liquidity of 25,000--            $0.34
                                                 59,999 contracts per day in a month.
Tier 3........................................  Participant adds Customer liquidity of 60,000-             $0.38
                                                 124,999 contracts per day in a month.
Tier 4........................................  Participant adds Customer liquidity of 125,000             $0.40
                                                 or more contracts per day in a month.
Tier 5........................................  Participant adds (1) Customer liquidity of                 $0.40
                                                 60,000 or more contracts per day in a month,
                                                 and (2) NOM Market Maker liquidity of 60,000
                                                 or more contracts per day in a month.
Tier 6........................................  Participant adds Customer liquidity of 25,000              $0.35
                                                 or more contracts per day in a month, and (2)
                                                 the Participant simultaneously qualifies for
                                                 credit under the Investor Support Program set
                                                 forth in Rule 7014.
----------------------------------------------------------------------------------------------------------------

    To further encourage firms that route Customer orders to increase 
Customer order flow to the Exchange, the Exchange is proposing to 
modify the Customer Rebates to Add Liquidity in Penny Pilot by adding a 
monthly volume target for NOM Participants that qualify for Tiers 2 and 
6. Specifically, firms that qualify for Tier 2 by adding Customer 
Liquidity in Penny Options of 25,000 to 59,999 contracts per day for 
the month, can receive an additional $0.02 rebate by contributing 
750,000 contracts of Customer Liquidity in Penny Options between 
September 6 and September 30, 2011. Also, firms that qualify for Tier 6 
by adding Customer Liquidity in Penny Options of 25,000 or more 
contracts per day for the month and also qualifying for a credit under 
NASDAQ's Investor Support Program (set forth in Rule 7014),\3\ can 
receive an additional $0.02 rebate by contributing 750,000 contracts of 
Customer Liquidity in Penny Options between September 6 and September 
30, 2011. NOM Participants that qualify for these two new tiers will 
receive an additional $0.02 rebate only for executions occurring 
between September 6 and September 30, 2011; volume executed on 
September 1, 2011 and September 2, 2011 will not be eligible.
---------------------------------------------------------------------------

    \3\ For a detailed description of the Investor Support Program, 
see Securities Exchange Act Release No. 63270 (November 8, 2010), 75 
FR 69489 (November 12, 2010) (NASDAQ-2010-141) (notice of filing and 
immediate effectiveness) (the ``ISP Filing''). See also Securities 
Exchange Act Release Nos. 63414 (December 2, 2010), 75 FR 76505 
(December 8, 2010) (NASDAQ-2010-153) (notice of filing and immediate 
effectiveness); and 63628 (January 3, 2011), 76 FR 1201 (January 7, 
2011) (NASDAQ-2010-154) (notice of filing and immediate 
effectiveness).
---------------------------------------------------------------------------

2. Statutory Basis
    NASDAQ believes that the proposed rule changes are consistent with 
the provisions of Section 6 of the Act,\4\ in general, and with Section 
6(b)(4) of the Act,\5\ in particular, in that it provides for the 
equitable allocation of reasonable dues, fees and other charges among 
members and issuers and other persons using any facility or system 
which NASDAQ operates or controls.
---------------------------------------------------------------------------

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

    The Exchange believes that the proposed new pricing tiers are 
equitable, reasonable and not unfairly discriminatory because they 
continue an existing program to encourage broker-dealers acting as 
agent for Customer orders to select the Exchange as a venue to post 
Customer orders. The Exchange believes that its success at attracting 
Customer order flow benefits all market participants by improving the 
quality of order interaction and executions at the Exchange.
    The Exchange further believes that limiting the new tiers to firms 
already qualifying for Tiers 2 and 6 (and not those that qualify for 
Tier 3, 4 and 5) is equitable and not unfairly discriminatory because 
NOM Participants in Tiers 3, 4, and 5 already earn a higher rebate. For 
example, a NOM Participant that qualify [sic] for the new tiers will 
receive a rebate of either $0.36 or $0.37 per contract, whereas NOM 
Participants that qualify for Tiers 3, 4 and 5 receive a $0.38 per 
contract rebate.
    The Exchange believes that the proposed new pricing tiers for 
Customer Rebates to Add Liquidity in Penny Options is equitable and not 
unfairly discriminatory because the Exchange will uniformly pay a 
Rebate to Add Liquidity to Customers executing Penny Options based on 
the 750,000 volume target and monthly tiers proposed and discussed 
herein.
    The Exchange operates in a highly competitive market comprised of 
nine U.S. options exchanges in which sophisticated and knowledgeable 
market participants can and do send order flow to competing exchanges 
if they deem fee levels at a particular exchange to be excessive or 
rebate opportunities to be inadequate. The Exchange believes that the 
proposed rebate scheme is competitive and similar to other rebates and 
tiers opportunities in place on other exchanges. The Exchange believes 
that this competitive marketplace materially impacts the rebates 
present on the Exchange today and substantially influenced the proposal 
set forth above.

B. Self-Regulatory Organization's Statement on Burden on Competition

    NASDAQ does not believe that the proposed rule change will result 
in any burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Act, as amended. Because the market 
for order execution is extremely competitive, members may readily opt 
to disfavor NASDAQ's execution services if they believe that 
alternatives offer them better value. For this reason and the reasons 
discussed in connection with the statutory basis for the proposed rule 
change, the Exchange does not believe that the proposed changes will 
impair the ability of members or competing order execution venues to 
maintain their competitive standing in the financial markets.

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

    The foregoing rule change has become effective pursuant to Section 
19(b)(3)(A)(ii) of the Act.\6\ At any time

[[Page 57778]]

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. If the Commission takes such 
action, the Commission shall institute proceedings to determine whether 
the proposed rule should be approved or disapproved.
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78s(b)(3)(a)(ii).
---------------------------------------------------------------------------

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-NASDAQ-2011-124 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-NASDAQ-2011-124. 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 No. SR-NASDAQ-
2011-124 and should be submitted on or before October 7, 2011.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\7\
---------------------------------------------------------------------------

    \7\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011-23722 Filed 9-15-11; 8:45 am]
BILLING CODE 8011-01-P