Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Modify Pricing for BX Members Using the NASDAQ OMX BX Equities System, 77862-77863 [2011-31998]

Download as PDF 77862 Federal Register / Vol. 76, No. 240 / Wednesday, December 14, 2011 / Notices III. Discussion Section 17A(b)(3)(F) of the Act 4 requires, among other things, that the rules of a clearing agency be designed to promote the prompt and accurate clearance and settlement of security transactions and to generally protect investors and the public interest. Because the proposed rule discourages persistent fails in the marketplace by expanding the application of the fails charge to Agency debt securities transactions, the proposed rule change promotes the prompt and accurate clearance and settlement of security transactions and generally protects investors and the public interest and therefore is consistent with the requirements of Section 17A(b)(3)(F) of the Act. IV. Conclusion On the basis of the foregoing, the Commission finds that the proposal is consistent with the requirements of the Act and in particular with the requirements of Section 17A of the Act 5 and the rules and regulations thereunder. It is therefore ordered, pursuant to Section 19(b)(2) of the Act,6 that the proposed rule change (File No. SR– FICC–2011–08) be, and hereby is, approved.7 For the Commission by the Division of Trading and Markets, pursuant to delegated authority.8 Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2011–31997 Filed 12–13–11; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–65912; File No. SR–BX– 2011–082] Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Modify Pricing for BX Members Using the NASDAQ OMX BX Equities System December 8, 2011. mstockstill on DSK4VPTVN1PROD with NOTICES Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’),1 and Rule 19b–4 thereunder,2 4 15 U.S.C. 78q–1(b)(3)(F). U.S.C. 78q–1. 6 15 U.S.C. 78s(b)(2). 7 In approving the proposed rule change, the Commission considered the proposal’s impact on efficiency, competition and capital formation. 15 U.S.C. 78c(f). 8 17 CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 5 15 VerDate Mar<15>2010 15:14 Dec 13, 2011 Jkt 226001 notice is hereby given that on November 29, 2011, NASDAQ OMX BX, Inc. (‘‘BX’’ 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 the Exchange. 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 The Exchange proposes to modify pricing for BX Members using the NASDAQ OMX BX Equities System. The Exchange will implement the proposed rule on December 1, 2011. The text of the proposed rule change is available on the Exchange’s Web site at https:// nasdaqomxbx.cchwallstreet.com, 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. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose BX is proposing to modify its fees for trades that execute at prices at or above $1. BX has a pricing model under which members are charged for the execution of quotes/orders posted on the BX book (i.e., quotes/orders that provide liquidity), while members receive a rebate for orders that access liquidity. Since BX introduced this pricing model in 2009, several other exchanges have emulated it, including the EDGA Exchange, the BATS–Y Exchange, and the CBOE Stock Exchange (‘‘CBSX’’). Currently, the credit provided for orders that access liquidity is $0.0014 per share executed if the order is entered through a BX Equities System Market Participant Identifier (‘‘MPID’’) through which the PO 00000 Frm 00097 Fmt 4703 Sfmt 4703 member accesses an average daily volume of 3.5 million or more shares of liquidity, or through which it provides an average daily volume of 25,000 or more shares of liquidity during the month. Members receive a credit of $0.0005 per share executed with respect to orders that access liquidity but that do not qualify for the requirements of this pricing tier. Effective December 1, 2011, BX will expand the criteria that enable an order to receive the higher credit to include orders entered through an MPID through which the member routes an average daily volume of 25,000 or more shares. The change reflects the fact that effective November 14, 2011, BX began offering an optional routing service to its members.3 Accordingly, as a means to incentivize members to use the new routing functionality, BX believes that it is appropriate to provide a discount to members that route significant volumes of orders using BX. 2. Statutory Basis BX believes that the proposed rule change is 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 BX operates or controls. All similarly situated members are subject to the same fee structure, and access to BX is offered on fair and nondiscriminatory terms. The proposed change will increase the credit paid to members that access liquidity at BX in circumstances where such members also route a specified volume of orders using BX. Because members that use the BX router will pay a fee for routed orders, and because routed orders will generally check the BX book before routing and therefore may partially execute at BX, increased use of the BX router has the potential both to increase BX’s revenue and to increase the volume of order flow that checks the BX book. Such an increase in order flow may, in turn, encourage members that seek to post liquidity to post non-marketable orders at BX, thereby increasing the depth of the BX book and encouraging still greater volumes of order flow to be directed to BX. Accordingly, BX believes that it is reasonable to offer a credit to members that make significant use of the BX 3 Securities Exchange Act Release No. 65470 (October 3, 2011), 76 FR 62489 (October 7, 2011) (SR–BX–2011–048). 4 15 U.S.C. 78f. 5 15 U.S.C. 78f(b)(4). E:\FR\FM\14DEN1.SGM 14DEN1 Federal Register / Vol. 76, No. 240 / Wednesday, December 14, 2011 / Notices router to encourage these potential benefits to its market quality. BX further believes that the proposed change is equitable because (i) members that receive the higher credit due to use of the BX router will also be paying fees associated with routing orders, (ii) other members may benefit from increased use of the BX router due to the potential for associated benefits to overall market quality, and (iii) existing means of receiving a credit of $0.0014 per share executed for liquidity-accessing orders remain unchanged. As a general matter, BX also believes that it is reasonable and equitable to use pricing incentives, such as a higher rebate for accessing liquidity, to encourage members to increase their participation in the market. Finally, BX notes that it operates in a highly competitive market in which market participants can readily favor competing venues if they deem fee levels at a particular venue to be excessive. In such an environment, BX must continually adjust its fees to remain competitive with other exchanges and with alternative trading systems that have been exempted from compliance with the statutory standards applicable to exchanges. BX believes that the proposed rule change reflects this competitive environment because it will use pricing incentives to encourage greater use of BX’s routing and execution facilities. mstockstill on DSK4VPTVN1PROD with NOTICES B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange 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 and routing is extremely competitive, members may readily opt to disfavor BX’s execution and routing 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, BX 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. VerDate Mar<15>2010 15:14 Dec 13, 2011 Jkt 226001 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 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. 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 email to rule-comments@sec.gov. Please include File Number SR–BX–2011–082 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–2011–082. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission’s Internet Web site (https://www.sec.gov/ rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for 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 the 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–2011–082 and should be submitted on or before January 4, 2012. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.7 Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2011–31998 Filed 12–13–11; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–65915; File No. SR– NASDAQ–2011–166] Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Rule 4613(a)(2)(D) To Clarify That the Designated Percentage for Rights and Warrants Is Thirty Percent December 8, 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 November 29, 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 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 Substance of the Proposed Rule Change NASDAQ proposes to amend Rule 4613(a)(2)(D) to clarify that the Designated Percentage for rights and warrants, which are no longer subject to Rule 4120(a)(11), is 30 percent. 7 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 6 15 PO 00000 U.S.C. 78s(b)(3)(A)(ii). Frm 00098 Fmt 4703 Sfmt 4703 77863 E:\FR\FM\14DEN1.SGM 14DEN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 76, Number 240 (Wednesday, December 14, 2011)]
[Notices]
[Pages 77862-77863]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-31998]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-65912; File No. SR-BX-2011-082]


Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change To Modify 
Pricing for BX Members Using the NASDAQ OMX BX Equities System

December 8, 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 November 29, 2011, NASDAQ OMX BX, Inc. (``BX'' 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 the Exchange. The Commission is publishing 
this notice to solicit comments on the proposed rule change from 
interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

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

    The Exchange proposes to modify pricing for BX Members using the 
NASDAQ OMX BX Equities System. The Exchange will implement the proposed 
rule on December 1, 2011.
    The text of the proposed rule change is available on the Exchange's 
Web site at https://nasdaqomxbx.cchwallstreet.com, 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.

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

1. Purpose
    BX is proposing to modify its fees for trades that execute at 
prices at or above $1. BX has a pricing model under which members are 
charged for the execution of quotes/orders posted on the BX book (i.e., 
quotes/orders that provide liquidity), while members receive a rebate 
for orders that access liquidity. Since BX introduced this pricing 
model in 2009, several other exchanges have emulated it, including the 
EDGA Exchange, the BATS-Y Exchange, and the CBOE Stock Exchange 
(``CBSX''). Currently, the credit provided for orders that access 
liquidity is $0.0014 per share executed if the order is entered through 
a BX Equities System Market Participant Identifier (``MPID'') through 
which the member accesses an average daily volume of 3.5 million or 
more shares of liquidity, or through which it provides an average daily 
volume of 25,000 or more shares of liquidity during the month. Members 
receive a credit of $0.0005 per share executed with respect to orders 
that access liquidity but that do not qualify for the requirements of 
this pricing tier. Effective December 1, 2011, BX will expand the 
criteria that enable an order to receive the higher credit to include 
orders entered through an MPID through which the member routes an 
average daily volume of 25,000 or more shares. The change reflects the 
fact that effective November 14, 2011, BX began offering an optional 
routing service to its members.\3\ Accordingly, as a means to 
incentivize members to use the new routing functionality, BX believes 
that it is appropriate to provide a discount to members that route 
significant volumes of orders using BX.
---------------------------------------------------------------------------

    \3\ Securities Exchange Act Release No. 65470 (October 3, 2011), 
76 FR 62489 (October 7, 2011) (SR-BX-2011-048).
---------------------------------------------------------------------------

2. Statutory Basis
    BX believes that the proposed rule change is 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 BX operates or controls. All similarly situated members are 
subject to the same fee structure, and access to BX is offered on fair 
and non-discriminatory terms.
---------------------------------------------------------------------------

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

    The proposed change will increase the credit paid to members that 
access liquidity at BX in circumstances where such members also route a 
specified volume of orders using BX. Because members that use the BX 
router will pay a fee for routed orders, and because routed orders will 
generally check the BX book before routing and therefore may partially 
execute at BX, increased use of the BX router has the potential both to 
increase BX's revenue and to increase the volume of order flow that 
checks the BX book. Such an increase in order flow may, in turn, 
encourage members that seek to post liquidity to post non-marketable 
orders at BX, thereby increasing the depth of the BX book and 
encouraging still greater volumes of order flow to be directed to BX. 
Accordingly, BX believes that it is reasonable to offer a credit to 
members that make significant use of the BX

[[Page 77863]]

router to encourage these potential benefits to its market quality. BX 
further believes that the proposed change is equitable because (i) 
members that receive the higher credit due to use of the BX router will 
also be paying fees associated with routing orders, (ii) other members 
may benefit from increased use of the BX router due to the potential 
for associated benefits to overall market quality, and (iii) existing 
means of receiving a credit of $0.0014 per share executed for 
liquidity-accessing orders remain unchanged. As a general matter, BX 
also believes that it is reasonable and equitable to use pricing 
incentives, such as a higher rebate for accessing liquidity, to 
encourage members to increase their participation in the market.
    Finally, BX notes that it operates in a highly competitive market 
in which market participants can readily favor competing venues if they 
deem fee levels at a particular venue to be excessive. In such an 
environment, BX must continually adjust its fees to remain competitive 
with other exchanges and with alternative trading systems that have 
been exempted from compliance with the statutory standards applicable 
to exchanges. BX believes that the proposed rule change reflects this 
competitive environment because it will use pricing incentives to 
encourage greater use of BX's routing and execution facilities.

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

    The Exchange 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 and routing is extremely 
competitive, members may readily opt to disfavor BX's execution and 
routing 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, BX 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 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 (https://www.sec.gov/rules/sro.shtml); or
     Send an email to rule-comments@sec.gov. Please include 
File Number SR-BX-2011-082 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-2011-082. This file 
number should be included on the subject line if email is used. To help 
the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's Internet Web site (https://www.sec.gov/rules/sro.shtml).
    Copies of the submission, all subsequent amendments, all written 
statements with respect to the proposed rule change that are filed with 
the Commission, and all written communications relating to the proposed 
rule change between the Commission and any person, other than those 
that may be withheld from the public in accordance with the provisions 
of 5 U.S.C. 552, will be available for 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 the 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-2011-082 and 
should be submitted on or before January 4, 2012.

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

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

Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2011-31998 Filed 12-13-11; 8:45 am]
BILLING CODE 8011-01-P

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