Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Routing Fees, 23788-23791 [2012-9529]
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tkelley on DSK3SPTVN1PROD with NOTICES
23788
Federal Register / Vol. 77, No. 77 / Friday, April 20, 2012 / Notices
Web sites and other information service
providers. The NAV will be published
by the Sponsor on each Warehouse
Business Day and will be posted on the
Trust’s Web site. The Exchange will
provide on its Web site a link to the
Trust’s Web site. In addition, the
Exchange will make available over the
Consolidated Tape quotation
information, trading volume, closing
prices and NAV for the Shares from the
previous day.
The proposed rule change is designed
to promote just and equitable principles
of trade and to protect investors and the
public interest in that a large amount of
information is publicly available
regarding the Trust and the Shares,
thereby promoting market transparency.
The Trust’s Web site will provide
ongoing pricing information for copper
spot prices and the Shares. Investors
may obtain almost on a 24-hour basis
copper pricing information based on the
spot price for an ounce of copper from
various financial information service
providers. NYSE Arca will disseminate,
approximately every 15 seconds, two
different intraday indicative values for
the Trust’s Shares—the First-Out IIV
and the Liquidation IIV. Market prices
for the Shares will be available from a
variety of sources including brokerage
firms, information Web sites and other
information service providers. The NAV
will be published by the Sponsor on
each warehouse Business Day and will
be posted on the Trust’s Web site. The
Exchange will provide on its Web site
a link to the Trust’s Web site. In
addition, the Exchange will make
available over the Consolidated Tape
quotation information, trading volume,
closing prices and NAV for the Shares
from the previous day. Trading in
Shares of the Trust will be halted if the
circuit breaker parameters in NYSE Arca
Equities Rule 7.12 have been reached or
because of market conditions or for
reasons that, in the view of the
Exchange, make trading in the Shares
inadvisable. Moreover, prior to the
commencement of trading, the Exchange
will inform its ETP Holders in an
Information Bulletin of the special
characteristics and risks associated with
trading the Shares.
The proposed rule change is designed
to perfect the mechanism of a free and
open market and, in general, to protect
investors and the public interest in that
it will facilitate the listing and trading
of an additional type of CommodityBased Trust Shares that will enhance
competition among market participants,
to the benefit of investors and the
marketplace. As noted above, the
Exchange has in place surveillance
procedures relating to trading in the
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18:17 Apr 19, 2012
Jkt 226001
Shares and may obtain information via
ISG from other exchanges that are
members of ISG or with which the
Exchange has entered into a
comprehensive surveillance sharing
agreement.
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 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
No written comments were solicited
or received with respect to the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
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
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rulecomments@sec.gov. Please include File
Number SR–NYSEArca–2012–28 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.
All submissions should refer to File
Number SR–NYSEArca–2012–28. This
Frm 00131
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For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.41
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2012–9528 Filed 4–19–12; 8:45 am]
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:
PO 00000
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 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–
NYSEArca–2012–28, and should be
submitted on or before May 11, 2012.
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–66817; File No. SR–
NASDAQ–2012–050]
Self-Regulatory Organizations; The
NASDAQ Stock Market LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change Relating to
Routing Fees
April 16, 2012.
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 April 11,
2012, The NASDAQ Stock Market LLC
(‘‘NASDAQ’’ or ‘‘Exchange’’) filed with
the Securities and Exchange
41 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
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Federal Register / Vol. 77, No. 77 / Friday, April 20, 2012 / Notices
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.
The text of the proposed rule change
is available on the Exchange’s Web site
at https://
www.nasdaq.cchwallstreet.com, at the
principal office of the Exchange, and at
the Commission’s Public Reference
Room.
set forth in sections A, B, and C below,
of the most significant aspects of such
statements.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The NASDAQ Stock Market LLC
proposes to modify Chapter XV, Section
2, governing pricing for NASDAQ
members using the NASDAQ Options
Market (‘‘NOM’’), NASDAQ’s facility for
executing and routing standardized
equity and index options.
In its filing with the Commission, the
Exchange included statements
concerning the purpose of and basis for
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,
Exchange
Customer
BATS ................................................................................................................
BOX .................................................................................................................
CBOE ...............................................................................................................
CBOE orders greater than 99 contracts in NDX, MNX ETFs, ETNs &
HOLDRs .......................................................................................................
C2 ....................................................................................................................
ISE ...................................................................................................................
ISE Select Symbols * .......................................................................................
NYSE Arca Penny Pilot ...................................................................................
NYSE Arca Non Penny Pilot ...........................................................................
NYSE AMEX ....................................................................................................
PHLX (for all options other than PHLX Select Symbols) ................................
PHLX Select Symbols ** ..................................................................................
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
The purpose of this rule filing is to
recoup costs that the Exchange incurs
for routing and executing Customer,
Firm, Market Maker and Professional
orders in equity and index options to
the BATS Exchange, Inc. (‘‘BATS’’). The
Exchange’s Routing Fees are located at
Chapter XV, Section 2, entitled
‘‘NASDAQ Options Market-Fees and
Rebates,’’ and are as follows:
Firm
MM
Professional
$0.55
0.11
0.11
$0.55
0.55
0.55
$0.55
0.55
0.55
$0.55
0.11
0.31
0.29
0.55
0.11
0.31
0.55
0.11
0.11
0.11
0.50
0.55
0.55
0.55
0.55
0.55
0.55
0.55
0.55
0.55
0.55
0.55
0.55
0.55
0.55
0.55
0.55
0.55
0.55
0.31
0.55
0.29
0.39
0.55
0.11
0.31
0.31
0.51
* These fees are applicable to orders routed to ISE that are subject to Rebates and Fees for Adding and Removing Liquidity in Select Symbols. See ISE’s Schedule of Fees for the complete list of symbols that are subject to these fees.
** These fees are applicable to orders routed to PHLX that are subject to Rebates and Fees for Adding and Removing Liquidity in Select Symbols. See PHLX’s Pricing Schedule for the complete list of symbols that are subject to these fees.
The Exchange is proposing to amend
the current BATS Routing Fees by
renaming those fees as ‘‘BATS Penny.’’ 3
The Exchange is not proposing to
amend the current rate of $0.55 per
contract for Customers, Firms, Market
Makers, and Professionals but proposes
to apply those fees solely to Penny
options routed to BATS.
The Exchange proposes to create new
Routing Fees to BATS for non-Penny
options. BATS recently adopted a $0.75
per contract non-Penny fee for
customers that remove liquidity from
the BATS Options order book and a
$0.80 per contract non-Penny fee for
Exchange
Customer
tkelley on DSK3SPTVN1PROD with NOTICES
BATS non-Penny .............................................................................................
NASDAQ Options Services LLC
(‘‘NOS’’), a member of the Exchange, is
the Exchange’s exclusive order router.
Each time NOS routes to away markets
NOS is charged a $0.06 clearing fee and,
in the case of certain exchanges, a
transaction fee is also charged in certain
symbols, which are passed through to
the Exchange. The Exchange currently
recoups clearing and transaction charges
3 BATS defines Penny options as those issues that
are quoted pursuant to BATS Rule 21.5,
Interpretation and Policy .01.
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SR–BATS–2012–015.
addition to membership fees and transaction
fees, the Exchange also incurs an Options
5 In
PO 00000
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Firm
$0.86
incurred by the Exchange when
Customer, Firm, Market Maker and
Professional orders are routed to an
away market. The Exchange currently
recoups clearing and transaction charges
incurred by the Exchange as well as
certain other costs incurred by the
Exchange when routing to away
markets, such as administrative and
technical costs associated with
4 See
professionals, firms and market makers
that remove liquidity from the BATS
Options order book.4 The Exchange is
proposing to adopt BATS non-Penny
Routing Fees to account for the new
BATS fees to remove liquidity and other
routing costs incurred by the Exchange
when routing to BATS, as follows:
MM
$0.91
Professional
$0.91
$0.91
operating NOS, the Exchange’s
exclusive order router; the Exchange’s
membership fees at away markets; and
technical costs associated with routing.5
The Exchange is adopting BATS nonPenny Routing Fees to account for the
BATS remove fees of $0.75 per contract
for customer orders and $0.80 per
contract for professional, firm and
market maker orders, the $0.06 clearing
Regulatory Fee when routing to an away market that
assesses that fee.
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Federal Register / Vol. 77, No. 77 / Friday, April 20, 2012 / Notices
tkelley on DSK3SPTVN1PROD with NOTICES
cost and another $0.05 per contract
associated with administrative and
technical costs associated with
operating NOS.
As with all fees, the Exchange may
adjust these Routing Fees in response to
competitive conditions by filing a new
proposed rule change.
2. Statutory Basis
NASDAQ NASDAQ [sic] believes that
the proposed rule changes are consistent
with the provisions of Section 6 of the
Act,6 in general, and with Section
6(b)(4) of the Act,7 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 amendment to the current
BATS Routing Fees to rename those fees
as ‘‘BATS Penny’’ and apply those fees
to Penny options routed to BATS and
adopt separate Routing Fees for nonPenny options routed to BATS is
reasonable because the two separate
categories take into account the different
fees to remove liquidity assessed by
BATS for non-Penny versus Penny
options. The Exchange seeks to recoup
costs incurred when routing orders to
BATS on behalf of its members.
The Exchange believes that the
proposed amendment to the current
BATS Routing Fees to rename those fees
as ‘‘BATS Penny’’ and apply those fees
to Penny options routed to BATS and
adopt separate Routing Fees for nonPenny options routed to BATS is
equitable and not unfairly
discriminatory because the Exchange
will uniformly apply the BATS Penny
as well as BATS non-Penny Routing
Fees to its members based on the type
of options orders routed to BATS.8
The proposed BATS non-Penny
Routing Fees are reasonable because
they seek to recoup costs that are
incurred by the Exchange when routing
Customer, Firm, Market Maker and
Professional orders to BATS on behalf of
members. Each destination market’s
transaction charge varies and there is a
standard clearing charge for each
transaction incurred by the Exchange
along with other administrative and
technical costs that are incurred by the
Exchange. The Exchange believes that
the proposed Routing Fees would
enable the Exchange to recover the
remove fees assessed by BATS for nonPenny options, plus clearing and other
6 15
U.S.C. 78f.
U.S.C. 78f(b)(4).
8 See note 3.
9 See Securities Exchange Act Release No. 61666
(March 5, 2010), 75 FR 12318 (March 15, 2010) (SR–
NASDAQ–2010–027).
7 15
VerDate Mar<15>2010
18:17 Apr 19, 2012
administrative and technical fees for the
execution of such orders when routed to
BATS. The Exchange also believes that
the proposed BATS non-Penny Routing
Fees are equitable and not unfairly
discriminatory because they would be
uniformly applied to all non-Penny
orders that are routed to BATS.
With respect to the Firm and Market
Maker Routing Fees, the Exchange
initially proposed to assess fixed
Routing Fees of $0.55 per contract
applicable to all away markets.9 The
Exchange noted in that rule change that
pricing on the various options
exchanges varies significantly from
exchange to exchange for non-Customer
orders. Accordingly, the Exchange
proposed a $0.55 per contract side
Routing Fee in order to capture the
majority of the transaction and clearing
fees for Firm and Market Maker orders,
while making the Exchange’s Routing
Fees easier to calculate and predict for
members whose proprietary orders are
routed away. In addition, fixed Routing
Fees are easier to comprehend by the
members whose orders are routed away.
Further, predicting, calculating and
charging back ‘‘pass-through’’ fees is an
unduly burdensome, expensive and
complicated task for members whose
orders are routed away. The Exchange
noted that fixed Routing Fees for Firm
and Market Maker orders should ease
the burden, expense and complexity of
this task. Furthermore, fixed fees are
easier to manage and maintain for the
Exchange, ensuring accurate billing and
accounting. The Exchange believes its
proposal to increase the BATS nonPenny Customer Routing Fee from $0.55
per contract to $0.86 per contract and
the Professional, Firm and Market
Maker Routing Fees from $0.55 per
contract to $0.91 per contract is
reasonable because the fees proposed by
BATS are not within the range of fees
assessed by other exchanges since the
recent increase in the BATS fee to
remove liquidity from $0.44 per contract
to $0.75 per contract for customer nonPenny options and from $0.44 per
contract to $0.80 for professionals, firms
and market makers. The Exchange
believes it is reasonable to recoup the
BATS remove fees plus the clearing and
other costs to recoup Routing Fees. The
Exchange believes that the increase to
the Firm and Market Maker non-Penny
BATS Routing Fees are equitable and
not unfairly discriminatory because, as
previously mentioned, those fees would
be similarly calculated for Customers,
Firms, Market Makers and
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Professionals.10 Additionally, the nonPenny BATS Routing Fees would be
uniformly assessed for all non-Penny
orders routed to BATS.
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
No written comments were either
solicited or 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.11 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 rulecomments@sec.gov. Please include File
Number SR–NASDAQ–2012–050 on the
subject line.
Paper Comments
• Send paper comments in triplicate
to Elizabeth M. Murphy, Secretary,
Securities and Exchange Commission,
10 The Exchange’s proposed non-Penny BATS
Routing Fees are calculated similarly for all
participants by adding the fee to remove liquidity
assessed by BATS for the particular market
participant plus a fee of $.11 per contract which
represents clearing and other costs noted herein.
11 15 U.S.C. 78s(b)(3)(A)(ii).
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Federal Register / Vol. 77, No. 77 / Friday, April 20, 2012 / Notices
100 F Street NE., Washington, DC
20549–1090.
All submissions should refer to File
Number SR–NASDAQ–2012–050. 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–
NASDAQ–2012–050 and should be
submitted on or before May 11, 2012.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.12
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2012–9529 Filed 4–19–12; 8:45 am]
BILLING CODE 8011–01–P
SMALL BUSINESS ADMINISTRATION
[Disaster Declaration #13060 and #13061]
Oregon Disaster #OR–00042
U.S. Small Business
Administration.
ACTION: Notice.
AGENCY:
This is a notice of an
Administrative declaration of a disaster
for the State of OREGON dated 04/02/
2012.
Incident: Severe Winter Storm
System.
tkelley on DSK3SPTVN1PROD with NOTICES
SUMMARY:
Incident Period: 01/17/2012 through
01/21/2012.
Effective Date: 04/02/2012.
Physical Loan Application Deadline
Date: 06/01/2012.
Economic Injury (EIDL) Loan
Application Deadline Date: 01/02/2013.
ADDRESSES: Submit completed loan
applications to: U.S. Small Business
Administration, Processing and
Disbursement Center, 14925 Kingsport
Road, Fort Worth, TX 76155.
FOR FURTHER INFORMATION CONTACT: A.
Escobar, Office of Disaster Assistance,
U.S. Small Business Administration,
409 3rd Street SW., Suite 6050,
Washington, DC 20416.
SUPPLEMENTARY INFORMATION: Notice is
hereby given that as a result of the
Administrator’s disaster declaration,
applications for disaster loans may be
filed at the address listed above or other
locally announced locations.
The following areas have been
determined to be adversely affected by
the disaster:
Primary Counties: Marion.
Contiguous Counties:
Oregon: Clackamas, Jefferson, Linn,
Polk, Wasco, Yamhill.
The Interest Rates are:
Percent
23791
OFFICE OF THE UNITED STATES
TRADE REPRESENTATIVE
Notice With Respect to List of
Countries Denying Fair Market
Opportunities for Government-Funded
Airport Construction Projects
Office of the United States
Trade Representative.
AGENCY:
ACTION:
Notice.
Pursuant to section 533 of the
Airport and Airway Improvement Act of
1982, as amended (49 U.S.C. 50104), the
United States Trade Representative
(USTR) has determined not to list any
countries as denying fair market
opportunities for U.S. products,
suppliers, or bidders in foreign
government-funded airport construction
projects.
SUMMARY:
Effective Date: Date of
Publication.
DATES:
Jean
Heilman Grier, Senior Procurement
Negotiator, Office of the United States
Trade Representative, (202) 395–9476,
or Greta Milligan, Assistant General
Counsel, Office of the United States
Trade Representative, (202) 395–4678.
FOR FURTHER INFORMATION CONTACT:
Section
533 of the Airport and Airway
Improvement Act of 1982, as amended
4.125 by section 115 of the Airport and
Airway Safety and Capacity Expansion
2.063
Act of 1987, Public Law 100–223
6.000 (codified at 49 U.S.C. 50104) (‘‘the
Act’’), requires USTR to decide whether
4.000 any foreign country has denied fair
market opportunities to U.S. products,
3.125 suppliers, or bidders in connection with
airport construction projects of $500,000
3.000 or more that are funded in whole or in
part by the government of such country.
The list of such countries must be
published in the Federal Register.
4.000 USTR has not received any complaints
or other information that indicates that
3.000 U.S. products, suppliers, or bidders are
being denied fair market opportunities
in such airport construction projects. As
The number assigned to this disaster
a consequence, for purposes of the Act,
for physical damage is 13060B and for
USTR has decided not to list any
economic injury is 130610.
countries as denying fair market
The State which received an EIDL
opportunities for U.S. products,
Declaration # is Oregon.
suppliers, or bidders in foreign
(Catalog of Federal Domestic Assistance
government-funded airport construction
Numbers 59002 and 59008)
projects.
SUPPLEMENTARY INFORMATION:
For Physical Damage:
Homeowners With Credit Available Elsewhere ......................
Homeowners Without Credit
Available Elsewhere ..............
Businesses With Credit Available Elsewhere ......................
Businesses
Without
Credit
Available Elsewhere ..............
Non-Profit Organizations With
Credit Available Elsewhere ...
Non-Profit Organizations Without Credit Available Elsewhere .....................................
For Economic Injury:
Businesses & Small Agricultural
Cooperatives Without Credit
Available Elsewhere ..............
Non-Profit Organizations Without Credit Available Elsewhere .....................................
VerDate Mar<15>2010
18:17 Apr 19, 2012
Jkt 226001
[FR Doc. 2012–9547 Filed 4–19–12; 8:45 am]
BILLING CODE 8025–01–P
CFR 200.30–3(a)(12).
Ronald Kirk,
United States Trade Representative.
[FR Doc. 2012–9499 Filed 4–19–12; 8:45 am]
12 17
Dated: April 2, 2012.
Karen G. Mills,
Administrator.
BILLING CODE 3190–W2–P
PO 00000
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]]>Agencies
[Federal Register Volume 77, Number 77 (Friday, April 20, 2012)]
[Notices]
[Pages 23788-23791]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-9529]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-66817; File No. SR-NASDAQ-2012-050]
Self-Regulatory Organizations; The NASDAQ Stock Market LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change
Relating to Routing Fees
April 16, 2012.
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 April 11, 2012, The NASDAQ Stock Market LLC (``NASDAQ'' or
``Exchange'') filed with the Securities and Exchange
[[Page 23789]]
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 Substance
of the Proposed Rule Change
The NASDAQ Stock Market LLC proposes to modify Chapter XV, Section
2, governing pricing for NASDAQ members using the NASDAQ Options Market
(``NOM''), NASDAQ's facility for executing and routing standardized
equity and index options.
The text of the proposed rule change is available on the Exchange's
Web site at https://www.nasdaq.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. 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
The purpose of this rule filing is to recoup costs that the
Exchange incurs for routing and executing Customer, Firm, Market Maker
and Professional orders in equity and index options to the BATS
Exchange, Inc. (``BATS''). The Exchange's Routing Fees are located at
Chapter XV, Section 2, entitled ``NASDAQ Options Market-Fees and
Rebates,'' and are as follows:
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Exchange Customer Firm MM Professional
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BATS............................................ $0.55 $0.55 $0.55 $0.55
BOX............................................. 0.11 0.55 0.55 0.11
CBOE............................................ 0.11 0.55 0.55 0.31
CBOE orders greater than 99 contracts in NDX, 0.29 0.55 0.55 0.31
MNX ETFs, ETNs & HOLDRs........................
C2.............................................. 0.55 0.55 0.55 0.55
ISE............................................. 0.11 0.55 0.55 0.29
ISE Select Symbols *............................ 0.31 0.55 0.55 0.39
NYSE Arca Penny Pilot........................... 0.55 0.55 0.55 0.55
NYSE Arca Non Penny Pilot....................... 0.11 0.55 0.55 0.11
NYSE AMEX....................................... 0.11 0.55 0.55 0.31
PHLX (for all options other than PHLX Select 0.11 0.55 0.55 0.31
Symbols).......................................
PHLX Select Symbols **.......................... 0.50 0.55 0.55 0.51
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* These fees are applicable to orders routed to ISE that are subject to Rebates and Fees for Adding and Removing
Liquidity in Select Symbols. See ISE's Schedule of Fees for the complete list of symbols that are subject to
these fees.
** These fees are applicable to orders routed to PHLX that are subject to Rebates and Fees for Adding and
Removing Liquidity in Select Symbols. See PHLX's Pricing Schedule for the complete list of symbols that are
subject to these fees.
The Exchange is proposing to amend the current BATS Routing Fees by
renaming those fees as ``BATS Penny.'' \3\ The Exchange is not
proposing to amend the current rate of $0.55 per contract for
Customers, Firms, Market Makers, and Professionals but proposes to
apply those fees solely to Penny options routed to BATS.
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\3\ BATS defines Penny options as those issues that are quoted
pursuant to BATS Rule 21.5, Interpretation and Policy .01.
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The Exchange proposes to create new Routing Fees to BATS for non-
Penny options. BATS recently adopted a $0.75 per contract non-Penny fee
for customers that remove liquidity from the BATS Options order book
and a $0.80 per contract non-Penny fee for professionals, firms and
market makers that remove liquidity from the BATS Options order
book.\4\ The Exchange is proposing to adopt BATS non-Penny Routing Fees
to account for the new BATS fees to remove liquidity and other routing
costs incurred by the Exchange when routing to BATS, as follows:
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\4\ See SR-BATS-2012-015.
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Exchange Customer Firm MM Professional
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BATS non-Penny.................................. $0.86 $0.91 $0.91 $0.91
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NASDAQ Options Services LLC (``NOS''), a member of the Exchange, is
the Exchange's exclusive order router. Each time NOS routes to away
markets NOS is charged a $0.06 clearing fee and, in the case of certain
exchanges, a transaction fee is also charged in certain symbols, which
are passed through to the Exchange. The Exchange currently recoups
clearing and transaction charges incurred by the Exchange when
Customer, Firm, Market Maker and Professional orders are routed to an
away market. The Exchange currently recoups clearing and transaction
charges incurred by the Exchange as well as certain other costs
incurred by the Exchange when routing to away markets, such as
administrative and technical costs associated with operating NOS, the
Exchange's exclusive order router; the Exchange's membership fees at
away markets; and technical costs associated with routing.\5\
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\5\ In addition to membership fees and transaction fees, the
Exchange also incurs an Options Regulatory Fee when routing to an
away market that assesses that fee.
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The Exchange is adopting BATS non-Penny Routing Fees to account for
the BATS remove fees of $0.75 per contract for customer orders and
$0.80 per contract for professional, firm and market maker orders, the
$0.06 clearing
[[Page 23790]]
cost and another $0.05 per contract associated with administrative and
technical costs associated with operating NOS.
As with all fees, the Exchange may adjust these Routing Fees in
response to competitive conditions by filing a new proposed rule
change.
2. Statutory Basis
NASDAQ NASDAQ [sic] believes that the proposed rule changes are
consistent with the provisions of Section 6 of the Act,\6\ in general,
and with Section 6(b)(4) of the Act,\7\ 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.
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\6\ 15 U.S.C. 78f.
\7\ 15 U.S.C. 78f(b)(4).
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The Exchange believes that the proposed amendment to the current
BATS Routing Fees to rename those fees as ``BATS Penny'' and apply
those fees to Penny options routed to BATS and adopt separate Routing
Fees for non-Penny options routed to BATS is reasonable because the two
separate categories take into account the different fees to remove
liquidity assessed by BATS for non-Penny versus Penny options. The
Exchange seeks to recoup costs incurred when routing orders to BATS on
behalf of its members.
The Exchange believes that the proposed amendment to the current
BATS Routing Fees to rename those fees as ``BATS Penny'' and apply
those fees to Penny options routed to BATS and adopt separate Routing
Fees for non-Penny options routed to BATS is equitable and not unfairly
discriminatory because the Exchange will uniformly apply the BATS Penny
as well as BATS non-Penny Routing Fees to its members based on the type
of options orders routed to BATS.\8\
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\8\ See note 3.
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The proposed BATS non-Penny Routing Fees are reasonable because
they seek to recoup costs that are incurred by the Exchange when
routing Customer, Firm, Market Maker and Professional orders to BATS on
behalf of members. Each destination market's transaction charge varies
and there is a standard clearing charge for each transaction incurred
by the Exchange along with other administrative and technical costs
that are incurred by the Exchange. The Exchange believes that the
proposed Routing Fees would enable the Exchange to recover the remove
fees assessed by BATS for non-Penny options, plus clearing and other
administrative and technical fees for the execution of such orders when
routed to BATS. The Exchange also believes that the proposed BATS non-
Penny Routing Fees are equitable and not unfairly discriminatory
because they would be uniformly applied to all non-Penny orders that
are routed to BATS.
With respect to the Firm and Market Maker Routing Fees, the
Exchange initially proposed to assess fixed Routing Fees of $0.55 per
contract applicable to all away markets.\9\ The Exchange noted in that
rule change that pricing on the various options exchanges varies
significantly from exchange to exchange for non-Customer orders.
Accordingly, the Exchange proposed a $0.55 per contract side Routing
Fee in order to capture the majority of the transaction and clearing
fees for Firm and Market Maker orders, while making the Exchange's
Routing Fees easier to calculate and predict for members whose
proprietary orders are routed away. In addition, fixed Routing Fees are
easier to comprehend by the members whose orders are routed away.
Further, predicting, calculating and charging back ``pass-through''
fees is an unduly burdensome, expensive and complicated task for
members whose orders are routed away. The Exchange noted that fixed
Routing Fees for Firm and Market Maker orders should ease the burden,
expense and complexity of this task. Furthermore, fixed fees are easier
to manage and maintain for the Exchange, ensuring accurate billing and
accounting. The Exchange believes its proposal to increase the BATS
non-Penny Customer Routing Fee from $0.55 per contract to $0.86 per
contract and the Professional, Firm and Market Maker Routing Fees from
$0.55 per contract to $0.91 per contract is reasonable because the fees
proposed by BATS are not within the range of fees assessed by other
exchanges since the recent increase in the BATS fee to remove liquidity
from $0.44 per contract to $0.75 per contract for customer non-Penny
options and from $0.44 per contract to $0.80 for professionals, firms
and market makers. The Exchange believes it is reasonable to recoup the
BATS remove fees plus the clearing and other costs to recoup Routing
Fees. The Exchange believes that the increase to the Firm and Market
Maker non-Penny BATS Routing Fees are equitable and not unfairly
discriminatory because, as previously mentioned, those fees would be
similarly calculated for Customers, Firms, Market Makers and
Professionals.\10\ Additionally, the non-Penny BATS Routing Fees would
be uniformly assessed for all non-Penny orders routed to BATS.
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\9\ See Securities Exchange Act Release No. 61666 (March 5,
2010), 75 FR 12318 (March 15, 2010) (SR-NASDAQ-2010-027).
\10\ The Exchange's proposed non-Penny BATS Routing Fees are
calculated similarly for all participants by adding the fee to
remove liquidity assessed by BATS for the particular market
participant plus a fee of $.11 per contract which represents
clearing and other costs noted herein.
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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
No written comments were either solicited or 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.\11\ 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.
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\11\ 15 U.S.C. 78s(b)(3)(A)(ii).
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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-NASDAQ-2012-050 on the subject line.
Paper Comments
Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission,
[[Page 23791]]
100 F Street NE., Washington, DC 20549-1090.
All submissions should refer to File Number SR-NASDAQ-2012-050. 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-NASDAQ-2012-050 and should
be submitted on or before May 11, 2012.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\12\
Kevin M. O'Neill,
Deputy Secretary.
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\12\ 17 CFR 200.30-3(a)(12).
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[FR Doc. 2012-9529 Filed 4-19-12; 8:45 am]
BILLING CODE 8011-01-P
